Blackstone snaps up Essel Propack; deal seen at Rs 3.2K crore post-open offer
Mumbai: Global private equity major Blackstone Group on Monday said that it has entered into a definitive agreement with Ashok Goel Trust to purchase a majority stake in Essel Propack Ltd.
Ashok Goel Trust and its affiliates currently hold about 57 per cent stake in Essel Propack.
Blackstone will buy shares at Rs 134 apiece to acquire a 51 per cent stake from Ashok Goel Trust.
As per Sebi regulations, the transaction will trigger a mandatory open offer for purchase of additional 26 per cent stake in the company. The open offer price has been fixed at Rs 139.19 per share.
Essel Propack is major a leading global specialty packaging company and the largest global manufacturer of laminated tubes.
Based on the open offer subscription, the purchase price consideration will vary between Rs 2,157 crore and Rs 3,211 crore (or $310 million-$462 million). Ashok Goel will retain a minority stake in the company. The sale is expected to complete in the coming months, subject to customary closing conditions and approvals.
“We are excited to partner with the management team and support EPL's customers with continued investments. 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. 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 in India at Blackstone.
EPL, founded in 1982, has 20 facilities across 10 countries and manufactures 7 billion tubes annually. EPL’s clientele includes marquee global brands in the oral care, beauty, cosmetics and pharmaceutical industries. Its last 12 months revenue as of December 31, 2018 was Rs 2,642 crore.
Ashok Goel, Chairman and Managing Director, EPL, said: “It has been a wonderful journey for me, leading EPL to a position of global leadership in specialty packaging especially laminated tubes. Today, EPL is a partner for leading global customers across sectors and geographies through sharp focus on innovation, sustainability and agility.”
Goel, who also runs Essel World, the first amusement park in Mumbai, is the younger brother of Subash Chandra, the promoter of Essel Group. The Essel Propack stock closed at Rs 132.65 on the BSE, gaining 0.95 per cent.
