Global private equity fund Advent International is all set to acquire a controlling stake in Bengaluru-based packaging solutions company Manjushree Technopack, valuing India’s largest PET manufacturer at Rs 2300 crore ($330 million), said two persons close to the development.
India’s packaging industry is gripped by an unprecedented global consolidation and promoter’s of India’s largest speciality packaging company, Essel Propack, are looking to sell out.
Domestic PE firm Kedaara Capital, which holds about 24% in Manjushree, will sell its stake while the promoter Vimal Kedia will also dilute his. However, Kedia will continue to run the business with a minority stake in the company.
Advent trumped Bangkok-based SCG Packaging in the final negotiations. Earlier in June, ET reported that several PE groups like Carlyle and KKR along with US-based firms IPG Inc and Graham Packaging Inc were evaluating the prospect of acquiring a controlling stake in the company.
A formal announcement is due in the coming weeks.
This deal would be the second largest buyout in Indian packaging industry after Finnish firm Huhtamaki Oyj acquired Mumbai-based Positive Packaging in 2014 for $336 million in the largest foreign buyouts in Indian packaging space.
Citi is the advisor in the transaction. Set up in 1983 by Vimal Kedia, Bengaluru-based Manjushree Technopack has clients such as GlaxoSmithKlineNSE 5.17 %, Coca-Cola, Nestle, Mondelez, PepsiCo, Reckitt Benckiser, DaburNSE 1.21 %, Perfetti Van Melle and Patanjali. For the fiscal year 2018, Manjushree Technopack had revenue of Rs 980–1,000 crore and growing at 20% annually.
The deal values the company at 2.4 times its revenue and may act as a benchmark for other deals in the space in the country.
At present, Manjushree has seven manufacturing plants across India catering to over 300 large and small customers with an installed capacity of over 125000 MT per annum.
Manjushree Technopack will be the third buyout deal for Advent in India. In 2017, Advent acquired Dixcy Textiles Pvt. Ltd, the South Indian firm which sells leading innerwear brand Dixcy Scott. In 2012, Advent bought 72% in Hyderabad-based CARE Hospitals, which was sold to Dubai based Abraaj Group in 2016.
Since 2015, Advent made investments in India in Dixcy, Crompton Greaves Consumer Electricals, Qu-EST Global Services and ASK Group.
Globally, Advent International has invested in over 340 private equity transactions in 41 countries and as of March 31, 2018, and had ¤33 billion ($38 billion) in assets under management. It had opened its India office in 2009 in Mumbai.
Indian Packaging industry is expected to grow from $32 billion in 2015 to $73 billion in 2020, growing at a rate of 18% per annum.
