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Deal Alert: StanChart PE invests $56-M in RJ Corp beverage unit

From the Press Release:

Varun Beverages (International) Limited (VBIL) has concluded a US$56 million private equity financing with Standard Chartered Private Equity Limited (SCPE). The funds would be used to accelerate VBIL’s growth in its beverages business in India and overseas. VBIL is promoted by the RJ Corp group which comprises diversified business interests ranging from beverages, fast food restaurants, ice creams & dairy products, breweries, education, health care and hospitality. VBIL is engaged in the business of bottling, distribution and marketing of soft drink beverages, sold under the trade marks owned by PepsiCo Inc., USA. VBIL, through itself and its subsidiaries, operates in India, Sri Lanka, Nepal and Morocco.

Commenting on the development, Mr Ravi K Jaipuria, Chairman, VBIL, said: "To convert the huge opportunity of growth, penetration and enhanced territories domestically and internationally into reality, we need to build, year after year, large capacities, involving huge capital expenditure. Induction of SCPE in group's core business of beverage shall help grow this business faster. "

Raj Gandhi President and Group (CFO) on the occasion said: "The business model is now totally hedged through operations at multiple geographies and induction of SCPE provides new opportunity to leverage the financials, expand at much faster pace and bring economies of scale."

Nainesh Jaisingh, Managing Director and Global Co-Head of SCPE said “We are extremely pleased to partner with the RJ Corp Group. The Group is a long standing client of Standard Chartered Bank and there exists significant overlap between our geographic footprints. With Pepsi’s backing, VBIL is already a leader in the beverage market, and we look forward to a long term association with the Group and the Company.”

Udai Dhawan, Director at SCPE who will be joining the VBIL Board said “The current low per capita consumption of soft drinks in India offers tremendous opportunity for VBIL. With over four decades of experience in the beverage business, a demonstrated track record and a highly experienced management team, the Company is uniquely positioned to capture this opportunity. The Company’s growth may further be aided through inorganic means. We are very excited to be a part of the Company’s next stage of expansion”.

The beverages operations were first started by the group in the 1960s and are growing rapidly after collaborating with Pepsico since their entry into India in 1991.

Other RJ Corp Busineses
The group's fastest growing multiple format restaurant business company Devyani International Ltd. partners international brands like Pizza Huts, KFC and Costa Coffee. Outside of India, it has presence in Nepal and Nigeria.

The group's Cream Bell ice cream operations are no more limited to only India or to a single product. It has its presence in Uganda and Kenya and operates into a complete range of dairy products. It recently started its third manufacturing facility to increase its capacity by 50 per cent at Kosi in Uttar Pradesh, after Baddi in Himachal and Goa. Its ice cream brand Cream Bell has won many awards for its quality and has a large range of exotic products.

The group's JV with ABInbev to brew beer is also spreading its presence in all the large beer consuming States through its brewing facilities at Hyderabad, Bangalore, Pune. It has ever-growing stem cells banking facility covering stem cells banking through-out India.

About Standard Chartered

Standard Chartered Private Equity Limited (SCPE) is the private equity arm of Standard Chartered Bank and has invested over US $ 2 billion in mid to late stage companies in need of expansion capital or acquisition finance and in management buy-outs.

Standard Chartered Bank is India’s largest international bank with 94 branches in 37 cities, a combined customer base of around 2 million retail customers and more than 2,000 corporate and institutional relationships. Key businesses comprise Consumer Banking, including deposits, loans, wealth management, private banking and SME banking; and Wholesale Banking, which includes cash transaction banking, treasury, corporate finance and custody services. For more information, visit www.standardchartered.co.in

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