ABF acquires Patak’s

Associated British Foods (ABF) may have paid substantially less than the £200M speculated by the press for Indian food business Patak’s, according to Graham Jones, analyst at Panmure Gordon.

ABF announced its acquisition of Patak’s from the founding Pathak family this morning. Completion is subject to regulatory clearances and other conditions, which the company expects to be satisfied by September.

The business comprises the Patak’s brand and assets in all countries except India. The gross assets of the business were valued at £40M as at October 2, 2005. Unaudited revenue for the company was £66M in the year to September 30, 2006.

ABF said the combination of Patak’s with its other ethnic brands, including Blue Dragon and subsidiary Westmill Foods’ Tolly Boy rice and Rajah spices, would create a leading position in the UK for the supply of world foods to retailers and wholesalers.

“ABF’s grocery business outside the UK will provide the capability and resource to drive the international growth of Patak’s,” it added.

Kirit Pathak, currently Patak’s chairman, will become chairman of the combined business of Patak’s and Blue Dragon and his wife, Meena Pathak, will also become a director.

Jones estimated the combined Patak’s/Blue Dragon UK will have sales of £150M-£200M. “Patak’s will also benefit from ABF’s international grocery presence, particularly in the US (ACH), Australia (George Weston Foods) and Asia (through Twinings/Ovaltine),” he added.

“This partnership will reinforce the leadership position of the Patak’s brand in Indian food worldwide and significantly enhance the capacity of Patak’s to realise its full global potential,” said Kirit Pathak.