IVFA to invest in food ingredients firm VKL Seasoning

Private equity firm India Value Fund Advisors (IVFA) is set to invest $40m in India-based ingredients firm Vallabhdas Kanji (VKL Seasoning), in order to support the latter’s transition from a wholesale firm to a value-added player.

Established in 1935, VKL Seasoning manufactures food ingredients and flavouring solutions in India and the Middle East, catering to quick service restaurants (QSR) and the processed food industry.

The company was initially a whole spices supplier but later expanded into private label and food ingredients businesses.

VKL exited the bulk spices and private label businesses through a sale to Singapore-based agribusiness firm Olam International for $18m in 2011, in order to focus on value-added food ingredients such as spices and seasoning.

The latest deal includes primary infusion and a secondary sale of shares of investors and would see the exit of Ascent India Fund, which invested $6m in VKL in 2006.

With this deal, Haresh Chawla and Vikram Nirula, partners at IVFA, have joined VKL’s board of directors.

VKL managing director Ajay Mariwala said that the company aims to expand its product offerings over the next few years in related food segments, with growth opportunities coming from a combination of organic and inorganic initiatives.

"This funding will help us grow our domestic capacities and expand business development efforts in the Middle East and Africa," Mariwala added.

IVFA managing partner Vishal Nevatia said that VKL is well positioned to benefit from robust growth in the underlying QSR and processed foods industries.

Avendus Capital and DSK Legal have been appointed as advisers to assess on the transaction.

IVFA was established in 1999 with a focus on investing in and transforming mid-sized businesses into world-class industry leaders.