Danone eyes PE's 30% to deepen French connection with Epigamia

French food group Danone is looking to double its stake in homegrown Greek yogurt and fruit-dessert maker Epigamia to 60% by buying out Belgian private equity firm Verlinvest‘s holding, said people directly aware of the developments.Both Verlinvest, the investment vehicle of the Belgian family behind the world’s largest brewer AB-InBev, and Danone Manifesto Ventures, the venture capital arm of Danone, currently hold about 30% each in Epigamia.

People said others may also show interest in Verlinvest’s stake, which could force Danone to match any rival offers.

“Given the heightened consumer and investor interest in health and wellness brands, consumer goods companies are also being tapped for a stake sale, given Epigamia’s brand equity, specially in urban markets,” said one of the persons cited above.

‘Negotiations Revived’
“Negotiations have been revived and are in the exploratory stages. It is not yet clear if Verlinvest will exit fully or dilute partial stake. It will depend on the valuation,” the person said. Epigamia tapped global bank Investec about 18 months ago to scout for a buyer for the company. At the time, large consumer goods companies such as Dabur and ITC were approached but a deal could not materialise due to a mismatch in valuation expectations.Epigamia owner Drums Food International and Danone did not respond to email queries. Verlinvest and its Singapore-based managing director Arjun Anand also did not respond to queries.

Epigamia – a maker of yogurt, smoothies, desserts and shakes – competes with Nestle, Mother Dairy and Amul, in addition to half a dozen direct-to-consumer brands. The brand’s founder Rohan Mirchandani passed away last December, at age 42. He had cofounded Drums Food International, which owns the brand, in 2013. The brand’s other cofounders and co-investors are Uday Thakker, Rahul Jain, Ganesh Krishnamoorthy and Ankur Goel.

Epigamia sells 24 varieties of products, across general trade and ecommerce, and quick platforms and its own online store, according to a January statement by the company when it announced its foray into the zero-sugar protein milk shake category.

Jain, a cofounder, currently steers Epigamia as its chief executive officer. The company had a valuation of Rs 1,250 crore as of December 2023, according to Tracxn.

Initially backed by DSG Consumer Partners and Verlinvest, it got Rs 182-crore investment from Danone Manifesto Ventures in 2019. At the time, high-net-worth individuals such as Cipla founding family’s Samina Vaziralli co-invested in the company. Bollywood actress Deepika Padukone-backed investment firm KA Enterprises too invested in Epigamia in 2019.