As reported by a person familiar with the transaction, Softbank and Tiger Global-backed OfBusiness has agreed to buy 100% of Koeleman India Pvt. Ltd., marking its entry into the food processing sector.
OfBusiness, formerly known as OFB Tech Pvt. Ltd., is a platform for raw material procurement and financing for small and medium-sized businesses. OfBusiness now has access to Koeleman India's cutting-edge food processing facility in Narsapura, Karnataka, as well as its export markets.
"The Indian food processing industry is seeing many transactions in the branded and private label space, and this transaction represents a growing appetite among large groups to expand their presence in this high-growth segment," said Sreeraj Krishnamoorthy, vice president of Singhi Advisors, the global investment bank that advised the Koeleman Group on the transaction.
Gijs de Rooij, director of Koeleman Beheer and Koeleman India, stated that dealing with OfBusiness and Singhi Advisors was a "great experience."
"From a European perspective, the perceived risk of selling a company in India is high, and there are many administrative differences between The Netherlands and India," he responded to ET's inquiry via email.
OfBusiness did not respond to a comment request.
Koeleman India, based in Bengaluru, is a subsidiary of the Dutch company Koeleman Foods International B.V. It is capable of processing fruits and vegetables such as gherkins, olives, jalapeo, bell pepper, and baby corn. It private labels these products for large food companies in the United States, Europe, and Australia.
The divestiture is part of the Koeleman Group's efforts to narrow its focus on its core competencies. The transaction is expected to be worth around $10 million.
While these products are already in high demand in the West, OfBusiness anticipates that demand will increase in India as people's dietary habits change.
OfBusiness began as a platform for the sale of industrial goods. Softbank, Tiger Global, Norwest, Zodius, and Matrix Partners have all invested. The company is also involved in the trading of food and agricultural commodities.
With several major companies expanding their product segments and new players entering the space, India's food sector has seen a lot of traction recently.
Wipro, based in Bengaluru, recently acquired Nirapara, a ready-to-mix and spice company based in Kerala. Dabur acquired Badshah Masala, allowing it to enter the spice and masala market. MTR Foods of Bengaluru acquired Eastern Condiments, and ITC acquired Sunrise Foods of Kolkata.