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 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. Spokespersons for Advent and Kedaara Capital declined to comment, while mails sent Vimal Kedia, MD- Manjushree, did not elicit any response till press time.
Citi is the advisor in the transaction. Set up in 1983 by Vimal Kedia, Bengaluru-based Manjushree Technopack has clients such as GlaxoSmith,Coca-Cola, Nestle, Mondelez, PepsiCo, Reckitt Benckiser, Dabur,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.
Kedaara Capital had acquired 24% in Manjushree at a valuation of about $100 million in 2015. Kedaara Capital also holds a stake in Mumbai -based manufacturer of folding cartons, Parksons Packaging Ltd.
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