Consumer food company LT Foods announced on Thursday that it will acquire a 51 percent stake in US-based Golden Star Trading Inc along with its brand for an undisclosed amount, with a call option to buy a further 49 percent equity at the end of three years.
The acquisition has been done through unlisted subsidiary LT Foods Americas Inc (LTFA), which contributed more than 35 percent of total revenue through its flagship Royal brand in North America, LT Foods said in a regulatory filing.
" Acquisition of the shares is done at a mutually agreed valuation, and such valuation was not disclosed for reasons of confidentiality," it said.
The acquisition was made entirely in cash. It added that the acquisition process will be completed on March 31 this year.
Golden Star Trading Inc., a family-owned business established in 1989 and headquartered in California, is engaged in the production of consumer foods. Its turnover is 55 million US dollars. It sells jasmine rice under the "Golden Star" brand.
Speaking on the occasion, LT Foods CEO and Managing Director Ashwani Kumar Arora said the acquisition of the Golden Star business fits and aligns perfectly with the company's strategic plan to expand its product offerings across all geographies.
“We have all been impressed by the Golden Star brand's track record and growth execution, and operational excellence, in producing and scaling consistent quality products.
He added: "We are excited about this expansion and also look forward to integrating the two businesses by leveraging the brand value of the Royal and Golden Star brand, as well as its well-established and robust distribution network."
Through this acquisition, the company said LTFA will be able to leverage its strong cross-channel distribution network to expand its share of the North American specialty rice market.
At the same time, it added, this acquisition will enable LTFA to obtain a more diverse and scalable offering, thereby strengthening its position in the US specialty rice market.
“This partnership allows the LTFA to strategically increase our share of the specialty grains market in North America,” LTFA President Abhinav Arora said.
Christina Wong, President and Promoter of Golden Star Trading, said, "We have sponsored the Golden Star brand for over 30 years and are looking for the right partner to partner with our brand. In LTFA, we have found the perfect strategic partner." Wong added that the team will work to nurture and enhance the value of the Golden Star brand while staying true to the company's founding principles.
LT Foods is a world leader in specialty rice, rice and organic food products, selling basmati rice under the Daawat brand in India and the Royal brand in North America.
Also Read: Amazon plans to file criminal case against Future Retail over store transfers: Report