Indigenous bakery chain Theobroma has cracked a ₹2,410 crore deal with private equity firm, ChrysCapital, which is expected to buy a 90 per cent stake from ICICI Venture, Theobroma’s existing investor and promoters.
ICICI Venture had bought its 42 per cent stake in the bakery for ₹130 crore in 2017. Reports say it would retain a 10 per cent stake in the company.
One of the most extravagant sell-offs in the history of bakery segments was carried out after six-month-long negotiations that saw a break for six weeks due to Theobroma’s weak financial results.
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The original valuation of the bakery was of ₹3,000 crore, asked by the founding family and other shareholders. Theobroma is said to have also explored the possibility of an initial public offering but backed out due to market volatility.
Other contenders for the acquisition included Bain Capital, Carlyle, and Switz Group, which operates Monginis baker chain.
ChrysCapital’s deal comes amid its plans to create a quick-service restaurant (QSR) platform by buying brands such as Theobroma and The Belgian Waffle Co.
The bakery, launched in 2004 by sisters Tina Messman Wykes and Kainaz Messman Harchandrai, took six years to grow from one store that started as a one-room enterprise. The bakery chain now has 225 outlets across India.
In her book, ‘The Theobroma Story: Baking a Dream’, Kainaz revealed her idea of starting her own bakery was the outcome of a back injury that she had sustained while working as a bakery chef at the Oberoi Udaivilas.
Having previously trained at Le Cordon Bleu in London, Kainaz and her sister had grown up helping their mother in her home-run business.
Their business, which was started with a capital of ₹1. 5 crore, was funded by their father. With plans to start a café but no real business growth plan in mind, Kainaz says they opened their first outlet in 2004 in Mumbai’s Colaba.
They were certain, however, that their desserts would be easy on the pocket and carry a taste of homemade goodness.
Due to a long struggle with expansion and high upfront costs of maintaining quality, Theobroma – which means ‘food of the Gods’ – secured its first loan of ₹5 crore in 2014.
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