Hindustan Foods Ltd. (HFL) on Thursday said it has acquired Reckitt Benckiser Health India Pvt. Ltd’s manufacturing facility in Baddi, Himachal Pradesh, for a cash consideration of ₹156 crore, aimed at expanding its healthcare and wellness business.
The transaction is subject to various conditions precedent as specified under the business transfer agreement. The transfer of the facility is expected to be completed by the second half of 2023.
The deal also requires approval of the state government for the transfer of land forming part of the undertaking and other customary approvals as required in relation to the transfer of licences/permissions under applicable laws.
“The company has identified the facility at Baddi of Reckitt as a suitable acquisition target because it is into manufacturing of various pharmaceutical and non-pharmaceutical products,” HFL said in a stock exchange filing.
HFL’s share surged 3.23% to end at ₹706 on Thursday.
The acquisition fits well with HFL’s plan to foray into contract manufacturing in the healthcare and wellness segment.
Earlier this year, the company acquired a 100% stake in Reckitt Benckiser Scholl India for ₹73 crore, marking its entry into the healthcare and wellness segment as a contract manufacturer.
Founded in 1984, Hindustan Foods offers dedicated and shared manufacturing services to fast-moving consumer goods (FMCG) companies looking to minimize manufacturing costs.
In 2013, diversified FMCG contract manufacturer Vanity Case Group bought a controlling stake in Hindustan Foods. Since then, the company has diversified across FMCG categories with manufacturing competencies in food, beverage, home care, fabric care, beauty and personal care, leather and sports footwear and pest control.
The company currently manufactures for brands such as Nykaa, Lakme, PeeSafe, BrookBond, Clinic Plus, Knorr, Paperboat, Hush Puppies, Arrow, Rin, Surf Excel, Dettol, Mortein, and Yardley London, etc.
In the second quarter of the ongoing financial year, the company recorded a 73.3% year-on-year growth in its profits to ₹18.9 crores from ₹10.9 crores in the same period last fiscal. The company’s revenue for the quarter increased by 40.7% on a year-on-year basis to ₹663 crore as compared to ₹471 crore income in Q2 FY22.