AB Foods buys Indian Food Company Patak's

Associated British Foods Plc has agreed to buy Indian food company Patak's from its founding Pathak family in a deal which analysts say is likely worth around 105 million pounds ($208 million).
AB Foods said on Tuesday that Patak's would boost its "world foods" business, which has been benefiting from Britons' increasingly adventurous culinary tastes and already includes the Blue Dragon brand of Chinese, Malaysian and Thai foods.
Laxmishanker Pathak, the father of current Chairman and Chief Executive Kirit Pathak founded Patak's in 1957, after he arrived from Kenya with just five pounds. It now supplies curry pastes, chutneys, pickles and pappadums for around three-quarters of Britain's 8,000 Indian restaurants. AB Foods did not disclose a value for the deal, but analysts said it was probably pitched at around 105 million pounds or 1.5 times Patak's forecast sales for the current financial year.
"We think we are in a strong position for organic growth (in world foods)," AB Foods Finance Director John Bassoon said. "With appropriate marketing support, new products and the growth of the market, this is a business that we think will grow very nicely in the future."
AB Foods said Kirin Pathak would become chairman of the combined Patak's and Blue Dragon business, and his wife and development director Meena Pathak would become a director. The business being acquired has 40 million pounds of assets, comprising the Patak's brand and assets in all countries where it is present except India.
Patak's, which has a factory in Lancashire, in northern England, generates three quarters of its sales in the UK and the rest in around 40 countries.
"This deal creates a new growth driver for AB Foods' grocery division and demonstrates its ability to continue to reinvest its strong cash flow in growth opportunities," Panmure Gordon analyst Graham Jones said.
Patak's had 66 million pounds of revenue in the year to end-September 2006. Shares in AB Foods, which refines Silver Spoon sugar and makes Ovulating beverages and Twinning tea, were up 0.7 percent at 932 pence, valuing the firm at around 7.3 billion pounds.