PE funds line up to take a bite of Belgian Waffle

A lot is cooking in the food and beverages space. The Belgian Waffle is on the block with several large private equity buyout funds making a beeline to bid for the speciality chain, sources aware of the discussions told TOI.

Deal talks seem to be in advanced stages of negotiations and are likely to close next month. "The company is professionally run and private equity invested, with the founder promoter involved only at a board level.

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The business has scaled and has been making very healthy profits. There could also be a lot of interest from suitors who are bidding for Theobroma. Getting both the businesses in their portfolio will add a lot of value," a source said. The Belgian Waffle couldn't be reached for comment immediately.

The Mumbai-based firm, owned and operated by Bloombay Enterprises, competes with players like Theobroma and other western dessert players such as Baskin Robbins and Mad Over Donuts in a growing local F&B market.

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The deal talks come amid booming investor appetite for the F&B space in India. Theobroma, which is in the market for a potential sale of majority stake in the firm, for instance, has reportedly garnered interest from PE firms like Carlyle Group.

Promoters own a majority stake in The Belgian Waffle-close to about 70% as of August 2023, data sourced from market research firm Tracxn showed. Mid-market PE fund Marathon Edge founded by former Bain Capital executive Nikhil Raghavan is the largest investor in the company with about 22% stake.

The company's revenue from operations stood at close to Rs 150 crore on a standalone basis in FY23 while it made net profits of Rs 21.3 crore during the period, according to the firm's RoC filings sourced from data platform Tofler. PE buyout funds typically take a controlling stake in businesses and exit at higher multiples.