Bain Capital is in talks to buy Daman-based Parksons Packaging Ltd for more than ₹3,000 crore ($411 million), two people aware of the discussions said, as the US private equity firm plots to bolster its portfolio of packaging businesses.
Parksons, India’s largest independent folding carton manufacturer that also makes paper-based labels, leaflets and corrugated boxes, recorded ₹500 crore revenue in 2019-20. Kedaara Capital purchased a significant minority stake worth ₹200 crore in the company in 2015.
“Parksons has steadily ramped up its business over the past three years and the pandemic has pushed up demand for packaging. The discussion for a complete sell-off of Parksons is in advanced stages. Kedaara will also get an exit,” said one of the two people cited above, both of whom spoke seeking anonymity.
Parksons has appointed Credit Suisse as its investment banker for the transaction, which is likely to be concluded in the next three months, the people cited above said.
Queries emailed to Parksons and Bain Capital remained unanswered.
“The fear of contracting covid is still lingering, which is pushing customers to order household goods and essentials online. This is why global investors are looking to grab investment opportunities in the packaging space, even if valuations come with a premium,” the person cited above added.
Parksons’ top clients include Coca-Cola, McDonald’s, KFC and Hindustan Unilever, besides several popular food and beverages, home and personal care and healthcare brands. Rising demand for packaging of household, medical, edible and lifestyle products is a key reason leading private equity firms to look at deepening their foothold in the packaging industry, especially in emerging economies such as India and China.
In March 2018, Bain announced the acquisition of World Wide Packaging LLC, a leading provider of cosmetic packaging components, plastic tubes, and formulation and filling technologies in the US.