In its regulatory filing today, the company said that "this is a strategic space relevant to the business of TTK Prestige engaged in the business of Kitchen & Home Appliances. Ultrafresh is in this business of Modular Kitchens since 2018 and has developed infrastructure for design, development, sourcing and sale and marketing of Modular Kitchens. They also have a captive source for sourcing Modular Kitchen Accessories and appliances like Kitchen hoods which will become part of Ultrafresh."
Further, the company said, "Branded Modular Kitchen is gaining ground with a fast expanding home construction industry and the aspirations of consumers to upgrade their kitchens. Thus, this investment has significant synergies with that of the business of TTK Prestige. It is expected to serve the long-term vision and growth of TTK Prestige."
The transaction is for cash consideration of Rs30cr towards primary as well as secondary acquisition. The transaction amount of Rs30cr will be released in stages eventually leading to a 51% equity shareholding of Ultrafresh Modular Solutions.
The transaction is expected to complete on or before January 31, 2022.
At the initial stage TTK Prestige Limited will hold around 40% of the equity and after completion of the investment, will hold 51% of the equity of Ultrafresh.
Ultrafresh was incorporated in 1992 and entered the Modular Kitchen business in 2018 with a young set of promoters/executives joining the business. In a sense, it is a startup business.
TTK Prestige will be able to leverage the network of Ultrafresh and enhance the reach of Prestige products in many new households. Meanwhile, Ultrafresh will be able to leverage the expertise of TTK Prestige while aggressively growing the Modular Kitchen business of various Kitchen Accessories.
At around 12.24 pm, TTK Prestige was trading at Rs10535.30 per piece down by Rs126.70 or 1.2% on Sensex.