Godrjet Agrovet buys 26% more in Creamline Dairy for Rs 150 cr; stakeholding reaches 51%

Godrej Agrovet on Monday said it has raised its stake in Creamline Dairy Products for Rs 150 crore, thus acquiring a controlling stake in the dairy firm.

Godrej Agrovet (GAVL), a subsidiary of Godrej Industries, was previously holding a stake of 26 percent in Creamline Dairy Products Ltd.

GAVL is a subsidiary of Godrej Industries and is one of the country’s largest animal feed firms.

The company had bought 26 percent stake in Creamline in 2005, and the fresh stake buy takes total holding in the Hyderabad-based firm to 51 percent at an enterprise value of about Rs 550 crore, Economic Times report said.

Creamline is the prominent dairy company in South India with significant operations across Telangana, Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra. It also has six certified milk processing plants having a capacity of 7.63 lakh litres per day.

“We have been shareholders of Creamline for the last 10 years…As the company embarks on its ambitious future growth plan we believe GAVL will be able to bring in significant value to the business by helping it develop successful brands and add more value added products to the current portfolio,” GAVL said in a regulatory filing.

“We have acquired additional 25 percent stake in Creamline Dairy for about Rs 150 crore,” said GAVL managing director Balram Singh Yadav.

The company has acquired the stake through a mix of primary infusion of Rs 51 crore and purchase of shares worth Rs 100 crore from the existing shareholders of Creamline Dairy, he said.

Yadav further said the existing promoters will manage the company and the primary infusion would be used for expansion of the dairy capacity in South India.

Creamline, which sells its products under the brand name Jersey, is in process of intensifying its procurement operations and has set up three processing units along with facilities for value added products.

“…we think Godrej Agrovet will add significant value to our business through their long association with Indian dairy farmers..Creamline expects to close FY 2015-16 with more than Rs 1,000 crore in sales,” Creamline Dairy managing director K Bhaskar Reddy said.

In Augugst, Godrej Group chairman Adi Godrej had said it will continue to scout for acquisitions in the FMCG sector in the developing economies, including India, to fulfill its vision of having 10-fold growth by 2020.

“The appetite is never satiated. We are still looking for (acquisitions) in the developing world and India is the part of the developing world,” chairman Adi Godrej had said then.

PTI