Dodla Dairy Ltd. approved acquisition of HR Food Processing Pvt Ltd. for Rs. 2,710 million

Dodla Dairy Ltd. (BSE - 543306, NSE - DODLA, ISIN: INE021001019), one of India's leading integrated dairy companies, today announced that the board of directors has approved acquisition of 100% issued and paid-up share capital of HR Food Processing Private Limited (Osam) ("Target Company") in compliance with the provisions of the Companies Act, 2013, SEBI Regulations and other applicable statutory requirements.

The transaction is proposed at an equity value of Rs. 2,710 million, subject to closing adjustments. This represents an enterprise value of Rs. 2,472 million plus net cash of Rs. 238 million in the target company. In this regard, the Company shall enter into Share Purchase Agreements ("SPAs"), and other transaction documents/ agreements with the existing promoters and shareholders of the Target Company. This is a fully cash transaction which is expected to be completed in one to two months from the date of signing the SPAs and other transaction documents / agreements, or such other period as may be extended by the parties to the SPA.

The completion of this acquisition is provisional to conditions precedent in the SPA and other transaction documents / agreements. Further, upon successful completion of the acquisition of 100% issued and paid-up share capital, the Target Company will become a Wholly Owned Subsidiary of Dodla Dairy Limited.

HR Food Processing Private Limited operates under the premium brand 'Osam' and has established a strong presence in Bihar, Jharkhand, and other eastern dairy markets of India. The company operates a vertically integrated supply chain that ensures full control and delivery of high-quality milk products to customers. . Osam has a procurement network with more than 25,000 plus dairy farmers, processes around 1.1 lakh litres of milk per day, and has 1000 collection centers and 19 chilling centers. The two operational processing plants has an installed capacity to process 1.8 LLPD of milk.

During FY25, Osam recorded revenues of Rs. 2,826 million with a 25% gross margin and 5% EBITDA margin. Milk constituted 72% of the sales, while the remaining 28% came from various VAP products, including curd, lassi, paneer, sweets, ghee and others.

Commenting on the development, Managing Director of Dodla Dairy, Mr. Dodla Sunil Reddy said, "We are thrilled to announce the proposed acquisition of Osam, marking a significant milestone in Dodla's journey. This strategic move underscores our commitment to becoming a Pan-India dairy company.

As a market, Eastern India is a very exciting market for the dairy industry with faster growth as compared to the national average. This market supports a large population, & milk consumption has immense headroom for growth driven by high urbanization potential and strong GDP growth.

We see tremendous synergies with Osam, which, when combined with Dodla's strong operational experience, will enable us to take this to the next level."

Shares of Dodla Dairy Limited was last trading in BSE at Rs. 1422.10 as compared to the previous close of Rs. 1412.05. The total number of shares traded during the day was 3382 in over 363 trades.

The stock hit an intraday high of Rs. 1430.90 and intraday low of 1389.50. The net turnover during the day was Rs. 4784334.00.

Source : Equity Bulls

Keywords

DodlaDairy Acquisition HRFoodProcessing