Blackstone has entered into a definitive agreement with Ashok Goel Trust that holds, along with affiliates, around 57% stake in Essel Propack
Blackstone is acquiring 51% stake in Essel Propack Ltd (EPL), the largest global manufacturer of laminated tubes, by investing up to Rs 3,211 crore, or $460 million. The majority shareholding in the global specialty packaging company will be bought by private equity (PE) funds managed by the global buyout major, said Essel Propack in a statement.
Blackstone has entered into a definitive agreement with Ashok Goel Trust that holds, along with affiliates, around 57% stake in Essel Propack. The PE major will pay Rs 134 a share for the 51% shareholding that will also trigger a mandatory open offer for the purchase of another 26% shares in the packaging firm. The open offer price has been fixed at Rs 139.19 per share, and based on this (open offer) the total deal value will vary between Rs 2,157 crore and Rs 3,211 crore.
Ashok Goel, chairman and managing director, EPL, said today Essel Propack is a partner for leading global customers across sectors and geographies through a sharp focus on innovation, sustainability and agility. "As we embark on the next trajectory of growth, Blackstone brings deep expertise in packaging space globally with senior team of highly experienced professionals with a proven track record of creating value," he said.
The sale is expected to complete in the coming months, subject to customary closing conditions and approvals, said the company, adding that the Ashok Goel Trust will continue to hold a minority stake in the packaging company.
Amit Dixit, senior managing director and head of private equity in India at Blackstone, said EPL has decade-long relationships with marquee global customers and a track record of product innovation. "Leveraging the ongoing industry shift to laminated tubes and EPL's leadership position in oral care, our plan is to accelerate growth in fast-growing end categories such beauty, cosmetics and pharmaceuticals. EPL is a leader in emerging markets and well-positioned to benefit from consumption growth across categories," said Dixit, adding that the investment follows Blackstone's long-standing belief and track record in the business-to-business-to-customer (B2B2C) sector.
EPL recorded revenues of Rs 2,642 crore as of December 31, 2018 and registered around 10% year-on-year growth against industry growth of around 2%. Increasing presence in emerging markets and further penetration in the fast growing beauty, cosmetics and pharmaceutical segments is expected to accelerate growth, going forward.
Founded in 1982, Essel Propack is engaged in manufacturing of laminated tubes. Through its 20 manufacturing facilities across 10 countries, employing over 3,158 people, the company makes seven billion tubes annually. Its clientele include marquee global brands in the oral care, beauty, cosmetics and pharmaceutical industries.
JOINING HANDS
- Rs 134 per share – Blackstone will pay for 51% shareholding
- Rs 139.19 per share – the open offer price has been fixed
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The sale is expected to complete in the coming months, subject to customary closing conditions and approvals, said the company, adding that the Ashok Goel Trust will continue to hold a minority stake in the packaging company.
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