JK Paper Ltd, a paper and packaging solutions company, has acquired Quadragen Vethealth Pvt. Ltd (QVPL) for ₹460 crore in an all-cash deal to diversify into the specialty animal health, nutrition, and feed additives business.
The transaction reflects an upfront acquisition of a 65% stake in QVPL, with the remaining expected to be bought in four years, JK Paper said in an exchange filing on Wednesday.
“This is a strategic acquisition in a promising and rapidly developing industry segment and provides a new opportunity for the company to grow,” Harsh Pati Singhania, chairman and managing director at JK Paper, said in the filing.
JK Paper shares were down 6.5% at ₹356.65 apiece in late morning trade on BSE, while the Sensex was up 0.39%.
QVPL is engaged in the business of manufacturing, marketing and exporting animal nutrition products, including feed additives and growth promoters. The Bengaluru-based company operates at ebitda margins of over 30% and is expanding at a compound annual growth rate of 20%, according to the filing.
Singhi Advisors advised on the transaction, which is JK Paper’s fourth acquisition in 2.5 years. Its previous acquisitions include that of Radhesham Wellpack Pvt. Ltd and Manipal Utility Packaging Solutions Pvt. Ltd.
In December, the company undertook a restructuring exercise where it merged its three wholly subsidiaries—Horizon Packs Pvt. Ltd, Securipax Packaging Pvt. Ltd, and JKPL Utility Packaging Solutions—into JK Paper to consolidate and streamline its operations.
JK Paper’s net profit declined to ₹65.39 crore in the quarter ended December from ₹235.11 crore in the same year-ago period. Revenue from operations fell to ₹1,631.99 crore from ₹1,706.22 crore.
“Sharp rise in imports at low price adversely affected sales volume and realisation in paper and board. This coupled with continuing high wood costs has resulted in a significant fall in profits,” Singhania said.
JK Paper is among the top producers of coated paper and packaging products in the country. The company products include copiers, bonds, coated papers, virgin fiber packaging boards, high-end maplitho, food-grade papers, boards, corrugated boxes, mono cartons, and labels.
Source: Mint