Devyani International Limited (DIL) and Sapphire Foods India Limited (SFIL) have announced a merger. DIL will issue 177 shares for every 100 shares of SFIL. The deal, subject to customary approvals, aims to create one of the largest QSR operators. Yum! is fully supportive. The merger is expected to take 12-15 months.
Strategic Merger Overview
Devyani International Limited (DIL) is set to merge with Sapphire Foods India Limited (SFIL). The merger will be executed through a share swap.
Key Transaction Terms
Under the agreement, 177 shares of DIL will be issued for every 100 shares of SFIL. SFIL Promoters currently hold 25.35% of SFIL (assuming full dilution from unvested ESOPs). 18.5% of paid-up capital will be acquired by Arctic International.
Strategic Rationale
This merger aims to create one of the largest QSR companies in India, with pan-India operations. Benefits include economies of scale and a stronger balance sheet.
Yum! Brands Approval
Yum! is supportive of the deal. Technology and Supply Chain Management (SCM) for KFC & Pizza Hut will transition to DIL. DIL will acquire 19 KFC outlets in Hyderabad currently operated by Yum! DIL will also pay a one-time fee to Yum! India.
Financial Highlights
The combined entity has a pro-forma revenue of ₹78,265 million and an EBITDA of ₹13,347 million.
Timeline and Approvals
The deal is subject to customary approvals and is expected to close in 12-15 months. Approvals needed include stock exchanges, SEBI, CCI, and NCLT.
Source: BSE
