Friesland-Campina in talks to buy majority stake in Parag Milk Foods

Dutch dairy cooperative Friesland-Campina is in talks to acquire a majority 60-75 per cent stake in Parag Milk Foods in a deal that will value the Pune-based company at around $350 million (Rs2,100 crore), The Economic Times today reported, citing three people with direct knowledge of the development.

The deal may see the promoters of Parag Milk Foods selling their entire stakes in the company, while existing private equity investors Motilal Oswal PE and IDFC Alternatives could also sell their stakes.

Motilal Oswal, owner of Gowardhan and Go brands, had invested Rs60 crore for a minority 20-per cent stake in 2008, and later sold 10 per cent to IDFC Alternatives. Other investors include International Finance Corp (IFC), which acquired a minority stake from the promoters for $17 million (Rs102 crore).

Founded in 1991 by Devendra Prakash Shah, Parag Milk Foods is a major manufacturer, exporter and supplier of pure natural dairy products.

The company's products include skim milk powder, whole milk powder, anhydrous milk fats, ghee, processed cheese, butter, butter oil, curd, dairy whiteners, and gulab jamun mix powders, and sells it through more than 3,00,000 retail outlets and has more than 2,000 distributors.

It clients include hotels, restaurants, institutions, and caterers, retailers, and also exports its products to the Middle East, South East Asian, and African countries.