Private equity firm ChrysCapital has resumed talks to acquire Theobroma Foods, a bakery chain in India, at a lower valuation of around Rs 1,800 crore (approximately $206 million). The acquisition process had stalled earlier due to the company’s weak financial performance.
Initially, Theobroma had been valued at a higher price of Rs 3,000 crore, but potential buyers had offered around Rs 1,000 crore, a significant departure from the initial ask. It seems that the private equity firm has agreed to pay a lower valuation due to the company’s financial struggles.
The exact details of the proposed deal are unclear, but it is likely that ChrysCapital will need to work to improve the bakery chain’s financial performance before finalizing the acquisition. The deal will also depend on various factors such as regulatory approvals and due diligence.
It is not uncommon for private equity firms to negotiate prices downward when they identify potential issues with the target company’s financials. In this case, it is likely that ChrysCapital has conducted its own due diligence and is now willing to acquire Theobroma at a lower valuation.
The acquisition of Theobroma by ChrysCapital could be a strategic move to improve the company’s financial health and potentially expand its business operations. The private equity firm has a track record of investing in Indian companies and has previously exited several successful investments.
In summary, ChrysCapital has resumed talks to acquire Theobroma Foods at a lower valuation of approximately Rs 1,800 crore, following a stall in negotiations due to the company’s weak financial performance. The deal is subject to various conditions, including regulatory approvals and due diligence, and is expected to improve the company’s financial health.