Blackstone to acquire majority stake in India’s Essel Propack for up to $460m

Blackstone Group LP headquarters stands in New York, U.S., on Friday, April 14, 2017. Photograph: Victor J. Blue/Bloomberg

Blackstone Group, one of the largest alternatives asset managers globally, on Monday said that it has entered into a definitive agreement with Ashok Goel Trust to purchase a majority stake in Essel Propack Ltd.

Essel Propack is a leading global specialty packaging company and the largest global manufacturer of laminated tubes. Mint reported in September that the stake sale in Essel Propack had seen interest from various parties including foreign packaging companies, including Amcor Ltd and Huhtamaki Oyj and various PE funds.

Ashok Goel Trust and its affiliates currently hold approximately 57% stake in Essel Propack. Blackstone will pay a purchase price of Rs134 per share to acquire a 51% shareholding from Ashok Goel Trust.

As per Sebi regulations, the transaction will trigger a mandatory open offer for a purchase of additional 26% shares of the company. The open offer price has been fixed at Rs139.19 per share.

Based on the open offer subscription, Blackstone will end up spending between Rs2,157 crore and Rs3,211 crore (or approximately $310 million – $462 million) for the acquisition.

Ashok Goel will retain a minority stake in the company. Morgan Stanley acted as the exclusive financial advisor to Ashok Goel.

“Essel Propack has decade-long relationships with marquee global customers and a track record of product innovation. Leveraging the ongoing industry shift to laminated tubes and Essel Propack’s leadership position in oral care, our plan is to accelerate growth in fast-growing end categories such beauty, cosmetics and pharmaceuticals. The company is a leader in emerging markets and well-positioned to benefit from consumption growth across categories. This investment follows Blackstone’s long-standing belief and track record in the B2B2C sector,” said Amit Dixit, senior managing director and head of private equity at Blackstone India.

Essel Propack, founded in 1982, 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 includes marquee global brands in the oral care, beauty, cosmetics and pharmaceutical industries.

“Today, Essel propack is a partner for leading global customers across sectors and geographies through 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,” said Ashok Goel, chairman and managing director at Essel Propack.

This article was first published on livemint.com