Biyani set to bite into Blue Foods

Indivision India Partners, the private equity arm of the Future Group, is close to picking up a stake, which could be in the range of 40-50%, in food & beverages (F&B) entity Blue Foods, which operates a chain of restaurants across the country. The company’s flagship brands include Copper Chimney, Bombay Blue, Noodle Bar, Gelato Italiano, Spaghetti Kitchen & Cream Centre. It also has a franchiseee agreement with California-based coffee chain Coffee Beans & Tea Leaf. Sources said the new promoters will merge Pan Foods Solutions — a JV between Pantaloon Retail and Blue Foods — with Blue Foods and pick up stake in the merged entity. Blue Foods owns all the brands managed by it except Copper Chimney and Cream Centre, which are licensed to the company.The financial details are currently unavailable since the size is being finalised and expected to be closed in the next week. Unconfirmed industry speculations say the Anil Ambani Group was also a serious contender for the restaurant business and had bid upwards of Rs 600 crore.Mr Sain and Mr Biyani are closely involved in finalising the deal with Mr Kapur, the managing director of Blue Foods. It is learnt that Mr Kapur had to simplify an earlier complicated structure and buy out stakes of the other three partners in the business. Following the merger, Mr Kapur will continue to be on the board of the company. The new promoters will infuse funds into the business to scale up the restaurants across various Future Group and other formats.Blue Foods operates across six verticals — food courts, casual dining, family restaurants, premium restaurants, the outdoor catering business and banquet services. Sources said it is one of the largest integrated F&B firms in the country. The company operates on a hub and spoke model with a centralised kitchen in every city that sources and stocks all raw materials required for its various restaurants. Blue Foods was set up as a chain of multi-cuisine lifestyle restaurants sometime in 2002 by two promoters — Sunil Kapur of Copper Chimney and Sanjiv Chona of Cream Centre in Mumbai in a strategic alliance with the promoters of Royal Sporting House of Singapore. The company has been grappling with high operational costs in a business where economies of scale needs to be significant for being profitable.