Sapphire Foods India (SAPPHIRE) investor relations material

Deal rationale and strategic fit

• Merger creates one of India's largest F&B and QSR platforms with over 3,000 stores, a diversified portfolio of marquee global and local brands, and pan-India reach.

• Unified franchisee for KFC and Pizza Hut across India, consolidating market presence and enabling accelerated growth and profitability.

• Focus areas post-merger include expanding KFC, strengthening Pizza Hut, and growing the non-Yum portfolio.

• Adds a strong international presence in Sri Lanka, complementing existing overseas operations.

• Aims to unlock sustained value creation for shareholders, customers, employees, and partners through scale and operational synergies.

Financial terms and conditions

• Share swap ratio set at 177 shares of the acquiring company for every 100 shares of the target, reflecting face value differences.

• Promoter-to-promoter transaction involves 18.5% of the target's equity to be acquired by a group company, with an option to assign to a financial investor.

• One-time payment to Yum! India for merger approval and additional territory license fee, capitalized on the balance sheet.

• Pro-forma FY2025 revenues projected at INR 78,265 million, with EBITDA margin at 17%.

Synergies and expected cost savings

• Net annual synergies estimated at INR 210–225 crores, with full realization expected within two years post-merger; 60% expected in the first year.

• Synergies stem from G&A optimization, procurement negotiations, unified technology investments, and Yum incentives.

• Margin expansion anticipated via productivity gains, overhead optimization, and scale benefits.

• Gross synergies are less than 1.5x net synergies, as costs for new functions and leadership are already netted off.