Spinach may develop the appetite to digest Valdel

Mumbai Retailer Extends Its M&A Binge To The South - Bangalore.

Wednesday, July 11, 2007:

MUMBAI -headquartered retail chain Spinach, part of Wadhawan Food Retail (WFRL),is extending its M&A binge into the southern markets now. It is eyeing Bangalore based Valdel Retail which operates stores under the Dailys and Centra brands in the dty and Mysore, sources said.

It is learnt that Spinach has had early talks with the diversified Valdel Group that emerged out of the MS Ramaiah family some years back. Four-year old Valdel Retail operates 12 supermarket stores (called Daily's) and department stores under the Centra brand. Sources close to the development said that the initial talks could move into structured negotiations in the coming weeks even though the deal is far from being finalised.

Spinach has been making a slew of acquisitions in the recent past, including Delhi based Sabka Bazaar, Home Store and Sangam - a home delivery business of FMCG heavy weight Hindustan Unilever. The last round of acquisition in De!hi gave it access to 35 Sabka Bazaar and over six Home Store outlets when it picked up 67% stake in the holding company of both reatilers. When contacted, Mr Kapil Wadhawan, director, Wadhawan Food Retail declined to confirm the news at this stage. "I am not aware of anything on this front," Mr Wadhawan told ET.However, Mr Wadhawan added: "We will take both organic and inorganic route to expand across India" ValdelRetail declined to comment. Valdel forayed into retail in November 2003 under Family Mart supercentre, but later restructured under Daily's and Centra brands.

Last year it was looking at raising $5-7 million from PE funds to expand the network to 25-30 stores in Karnataka. WFRL plans to set up 1.500 stores in 90 cities in four years, With investments of Rs 1,500 crore. Depending on the store size, the Spinach store will be called Spinach Super, Spinach Local and Spinach.Express. Having taken controlling sake in Home Store, WFRL is looking at expanding in the home and lifestyle product category. Flagship company Wadhawan Group has diversified business interests including Dewan Housing Finance Corporation, a housing finance company.