Brand KPN in deal worth Rs 800 cr with Westbridge
The deal values KPN at Rs 800 crore, with WestBridge picking up a nearly 70 per cent stake in an all-cash deal for about Rs 550-600 crore.
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CHENNAI: WestBridge Capital has taken a majority stake in the fruits and vegetable retail chain KPN Farm Fresh, as per a media report, citing sources.
The retail entity, Kovai Pazhamudhir Nilayam (KPN), is said to be profitable, generating Rs 400 crore revenues. From a TN-centric brand, it is looking to expand in other southern states as well. The deal was concluded a few weeks ago, a Moneycontrol report said.
The deal values KPN at Rs 800 crore, with WestBridge picking up a nearly 70 per cent stake in an all-cash deal for about Rs 550-600 crore. The balance would remain with the promoters, and Senthil Natarajan, the current Managing Director, will continue to the run the operations.
As per a market source, the Moneycontrol report said Veda Corporate Advisors were advisors for the transaction. While WestBridge and Veda did not respond to queries, KPN MD Senthil Natarajan said he had no comments to offer. KPN’s journey began in the 1960s in Coimbatore when Senthil’s father R Natarajan, the second of four brothers, dropped out of school to sell fruits with his older brother, to support his family, after losing their father, who was the only income producer.
The two brothers used his savings to open his first store in the year 1965, with an investment of Rs 300. The shop was named ‘Pazhamudhir Nilayam’. It pioneered the concept of fair, fixed prices and sold items by their weight instead of by the dozen, as per the report.
In 2012, they formally established KPN Farm Fresh with 60 per cent stake in the company, while the balance was distributed among partners in existing KPN outlets, as per another media report.
The company has one 20,000 square feet warehouse in Coimbatore and another 1.5 lakh square feet warehouse located in Vanagaram, on the outskirts of Chennai, a report said.
WestBridge Capital’s move, meanwhile, to buy a majority stake in KPN Farm Fresh comes at a time when the private equity firm, one of the most active start-up investors in India, has slowed the pace of deploying capital, amid deteriorating macroeconomic climate. The PE has just participated in one deal so far this year while it invested in 25 companies in 2022, the Moneycontrol report said.
