Indian food major sold at £100 mn
Patak's, an Indian food company set up by an Indian immigrant in the UK with only 5 pounds in 1950, has been sold for £100 mn.india Updated: May 31, 2007 19:10 IST
Patak's, an Indian food company set up by an Indian immigrant who came in London in the 1950s with only five pounds in his pocket, has been sold for over 100 million pounds, signalling a landmark in Britain's ongoing love affair with palate-tingling Indian cuisine.
Financial details of the deal between Patak's and British food and clothes major Associated British Foods (ABF) have not been disclosed but industry experts believe the takeover is worth a little over 100 million pounds. The takeover of Patak's by the Primark and Ovaltine owner will be in August.
Patak's supplies Indian food products to an estimated 75 per cent of Britain's Indian restaurants. Under the deal, ABF will take on the entire business except its operations in India, and ownership of the Patak's brand.
The company is wholly owned by the Pathak family, with around half its 650 staff employed at its Leigh factory. Besides cooking sauces, pickles and breads, it supplies ready meals, which are sold through major retailers, and makes own-brand products for supermarket chains.
The Pathak family will remain involved in the business under the terms of the deal. Chairman and chief executive Kirit Pathak, who joined the firm at the age of 17, will become chairman of ABF's combined world foods group, while his wife Meena also becomes a director.
Patak's was founded by Laxmishankar Pathak, who arrived in the UK from Kenya with his wife and six children and only five pounds and a life insurance policy in his pocket. He experienced great difficulty in finding a job and believed there was an opportunity in selling authentic Indian food to Indians in the country.
He started to make and sell samosas in his tiny 5ft x 6ft kitchen and eventually raised sufficient money to buy his first shop - No. 134 Drummond Street, London. He then decided to extend the range that he and his wife manufactured to include other authentic products, including pickles and chutneys.
The quality of the products spread by word of mouth and orders from shops, housewives and students flooded in. LG Pathak also started catering for functions at the Indian High Commission. It has since expanded exponentially to emerge as a multimillion-pound company that has dominated the British Indian food market.
In a press statement, the ABF said it had reached an agreement to buy the Patak's brand from the Pathak family. It said the gross assets of the business being acquired were 40 million pounds as of Oct 2 2005. Unaudited revenue for the year to Sep 30 2006 was 66 million pounds.
Kirit Pathak said: "With its experience in the world foods sector and international scale of operations, ABF is the ideal strategic partner for the Patak's brand. Moreover, this partnership will reinforce the leadership position of the Patak's brand in Indian food worldwide and significantly enhance the capacity of Patak's to realise its full global potential as the reference Indian food brand."
George Weston, chief executive, ABF said, "We are privileged to be able to acquire as fine a business as Patak's. We look forward to working with Kirit and Meena Pathak to build this business further."
Kirit Pathak received an OBE in 1997 and Meena received the same accolade in 2002. Meena, as director of product development, is the creative force behind the Patak's brand and approves every single recipe.
On an average, she helps develop and approves over 20 new recipes a year. Each recipe has its own secret spice mix formulations. These formulations are kept a very closely guarded secret and are known only to the Pathak family.
The company recently introduced new packaging aimed at attracting North American consumers to the growing ethnic food category. The bold new colours and glass jars add an eye-catching, more modern look to the Patak's line.
Patak's has further expanded recently by adding new manufacturing facilities - a frozen food factory in Dundee, an Indian bread factory in Glasgow, the head office in Haydock, Lancashire and an 18 million pounds investment in a new state of the art food processing factory, which at 164,000 sq ft is believed to be the largest Indian food factory in the world.
The new factory in Leigh, near Wigan, was officially opened on Feb 1, 2002, by Cherie Booth Blair, wife of the British prime minister. In January 2005, Patak's acquired a specialist ethnic snacks business in Glasgow Scotland.