AB Foods swallows Patak's Indian food business for £100m

The extraordinary rags-to-riches tale of the founding family of the Patak Indian food empire moved into its final chapter yesterday when the company was sold for an estimated £100m.

Kirit Pathak, whose father arrived in London from Kenya in 1956 with just a fiver in his pocket, has sold the business to the food and clothing retailer Associated British Foods who wish to develop the brand globally.

Mr Pathak will stay on as chairman to oversee Patak's and ABF's Blue Dragon oriental brands. His wife, Meena, who is often seen as the driving force of the business, will become a director at the company.

Although ABF has not disclosed the financial details of the sale, analysts put the figure at around £100m.

Mr Pathak's grandfather was a subsistence farmer in Gujarat and his father, Laxmishanker, who was born in 1925, left India for Kenya where he became one of the country's most famous sweet and snack makers. But as the Mau Mau rebellion took hold in the Fifties, Laxmishanker fled with his wife Shantagauray and their six children to the UK. Following a difficult period sweeping the streets, Laxmishanker set up Patak's in the family's north London home, dropping the 'h' from the name to make it easier to pronounce. One of his first clients was the Indian High Commission in London.

The company, which is now based in Wigan, Lancashire, has grown into a curry empire with annual sales of around £70m. It makes 30 million jars of curry sauce and 1.5 million ready meals a year and supplies 6,000 restaurants, cash and carries and supermarkets. The company was able to add new products after acquiring a frozen food plant in Dundee in 1997 and a chilled foods business in Bellshill, north Lanarkshire in 2005.

For the next stage in its development, Mr Pathak was keen to bring in the extra weight of an international company to build up Patak's global operations. It already sells in 40 countries. He said yesterday: "This partnership will reinforce the leadership position of the Patak's brand in Indian food worldwide."

John Bason, the finance director at ABF, which owns the Primark retail clothing chain and food brands including Silver Spoon and Twinings, said the trend in the UK for "variety spicy foods was set to continue" while the potential for developing the brand in global markets was huge. "It is already a great brand," he said. "It is a fantastic starting point."

The UK accounts for 85 per cent of sales. Mr Pathak, who joined the family business at 17, retains ownership of the Indian business.

Graham Jones, analyst at Panmure Gordon, said the combination of ABF's Blue Dragon brand and its Westmill ethnic wholesale business will "create a significant, and growing, business in ethnic foods".

The Pathak family has hit the headlines in recent years due to a family feud over ownership of the company. Mr Pathak emerged as 100 per cent owner of the business last year following a lengthy court battle with his two sisters, which was dubbed "the Spice Wars". The sisters, Chitralekha Mehta and Anila Shastri, claimed they had missed out on shares in the firm left to them by their late father.

The case provoked controversy after they ran up a huge legal aid bill, but they later settled out of court for a reported £8m.