CHENNAI: Modern Foods, the company behind the iconic bread and bakery brand ‘Modern’ breads — is changing hands once again.
Singapore-based private equity firm Everstone Capital has sold Modern Foods to Mexico’s Grupo Bimbo and its Indian subsidiary Ready Roti India. The financial details of the deal were not disclosed. Grupo Bimbo, the world’s largest baking company, operates in 33 countries, including India, and has a portfolio of over 13,000 products and more than 100 brands.
Everstone, through its bread and bakery platform Everfoods Asia, acquired Modern from Hindustan Unilever (HUL) in 2016 and gave the brand a face lift, relaunching it in 2017.
Modern Foods, established in 1965, was the company to sell branded bread in the country. It later became first PSU to be sold under the government’s disinvestment programme.
In 2000, HUL (the erstwhile Hindustan Lever) had acquired the government’s 74% stake for Rs 105 crore. The objective behind this acquisition was to bolster its foods portfolio. After three years, this was followed by HUL acquiring the balance government stake for Rs 44 crore.
With 14 production units across the country then, Modern was a popular brand. Bread, a low-entry product, did face its own share of competition from healthier options on the breakfast table.
However, even after HUL invested in the business and turned it around while also enhancing its productivity, Modern no longer fitted with HUL’s food portfolio growth strategy. HUL then decided to sell the business in 2015.
“We are a private equity investment firm and our business is to create substantial value in our portfolio companies, lead them into the next phase of growth and eventually find them another home where they will prosper further. Grupo Bimbo, being the largest baking company in the world, ticked all the boxes for us and we wish Modern a flourishing future,” Everstone Capital Asia managing director Roshini Bakshi said on Wednesday.
When Everstone acquired the brand from HUL, it reportedly had a turnover of around Rs 250 crore. It was acquired at the same price as the turnover, according to reports.