April 15, 2024

Lighthouse Funds invests ₹700 crore in FMCG contract manufacturer Parsons Nutritionals

Private equity fund Lighthouse Funds has invested ₹700 crore in Parsons Nutritionals — a contract manufacturer specializing in packaged foods, beverages, and personal care products.

The round saw participation from co-investors of Lighthouse, including the International Finance Corporation (IFC), a member of the World Bank Group, Evolvence India, HDFC AMC’s Fund of Funds, and various family offices.

Parsons represents Lighthouse’s third investment from its $425 million Lighthouse India Fund IV.

Founded in 2002 by S.S. Mann, Parsons serves as a third-party contract manufacturer for major fast-moving consumer goods (FMCG) companies, including Mondelez, Hindustan Unilever Ltd, Britannia Industries, and General Mills. The company’s production lines extend to cookies, biscuits, chocolates, confectionery, malted beverages, and ready-drink mixes, and it has recently expanded into personal care products like shampoos and soaps.
The company operates multiple manufacturing facilities across five states, and this investment from Lighthouse marks Parsons’ maiden round of external funding from a private equity investor. According to Lighthouse, the funds will be used to expand manufacturing capacities in both existing and new product categories to meet the needs of current and future clients.

“As we continue to evolve as an institution, it was the right time to have a partner in Lighthouse on our next journey of growth. Their long-term vision and familial values perfectly match the DNA we have at Parsons,” said Mann, promoter and chairman, Parsons Nutritionals.

Many large consumer goods companies are increasingly outsourcing manufacturing to third-party producers, in addition to running their own facilities. This trend is growing as both Indian and international FMCG companies step up their investments in India, driven by a rising demand for packaged goods.

Parsons is well-placed to benefit from increased consumption and outsourcing trends, said Sachin Bhartiya, co-founder and partner, Lighthouse Funds.

“This investment fits well into our long-term thesis of consumer products getting more organized, more branded, and more premium,” Bhartiya added.

Lighthouse, a mid-market private equity firm, focuses on investments in the consumer and healthcare sectors. Since beginning its operations in India in 2007, Lighthouse has invested in over thirty companies across consumer brands, healthcare, and specialty manufacturing. Its investment portfolio includes companies such as Unibic, Bikaji, Wow! Momo, Kama Ayurveda, and Nykaa, among others. Recently, Lighthouse has also made new investments in Kushal’s Retail, a fashion jewelry retailer, and Safari, a luggage manufacturer.

The Rainmaker Group served as the exclusive financial adviser on this transaction.

(As published in livemint.com, 15 April, 2024 )

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