Zydus Cadila buys Kraft Heinz's Indian businesses, including Complan, for Rs 4,595 crore

The valuation includes net working capital of Rs 40 crore, cash of Rs 15 crore and assumes no debt. The transaction is expected to close in Q4 FY 19, subject to regulatory approvals. The transaction is proposed to be financed by a mix of equity and debt.

Dr Sharvil Patel, chairman, Zydus Wellness Ltd, said, "This is an exciting time. This development offers immense opportunity to broaden our portfolio and invest in brands and products that we believe are most relevant to health conscious consumers."

Speaking on the deal, Vishal Gutka, analyst, Phillip capital, said, "The deal has happened at 4 times price-to-sale and maybe 20 times EV (Enterprise value) /EBITDA (Earnings before interest, taxes, depreciation, and amortisation). We believe it's in-line with other acquisitions that have been made in FMCG space as of now. We expect higher valuation for GSK as it's a leader in this category."

Abneesh Roy, senior vice president, Edelweiss Securities, said the deal is good for Zydus in valuation wise, "It works to around 4 times EV to sales and EV/EBITDA also on the lower side versus current listed names on the FY18 numbers."

"The names that are doing rounds for Horlicks, they are much bigger with stronger balance sheet and capabilities to spend. So, at least they are out of the way in terms of competing with the biggies. They have chosen a niche, which they could expand very quickly," Prakash Diwan, market analyst, said.

"It's also not something that Zydus has overly paid for. So, my sense is that the market is going to like it and the way they grow it also is going to be much more manageable," Diwan added.

The acquisition of the Indian assets of Kraft Heinz Co has been fiercely contested. Kraft Heinz India’s consumer business together clocked Rs 1,200 crore in sales in the last financial year.

In the last round of bidding, FMCG major Coca-Cola along with a consortium of private equity players had submitted bids.

The Tatas and Dabur too were reportedly in the race. In the latest round, potential buyers had bid for different parts of the Kraft Heinz India business.

Zydus Wellness has brands such as Everyuth, Sugar Free, Nutralite and Actilife in its portfolio.