As part of the transaction, existing private equity investors – Kedaara Capital, Olza Holdings Limited and IIFL, have fully exited their investment in Parksons and the promoters Kejriwal family has sold a partial stake, said a company statement.
Ramesh Kejriwal, Siddharth Kejriwal and Chaitanya Kejriwal will continue to retain their current positions of Chairman, Managing Director and Joint Managing Director, respectively, and will drive the business going forward.
Warburg Pincus is understood to have emerged the highest bidder to acquire a controlling stake in India’s largest independent folding carton manufacturer Parksons Packaging, outbidding peers such as KKR and Bain Capital besides Finnish packaging materials major Huhtamäki Oyj, ET reported on March 31.
A potential deal with Warburg will value the company at Rs 2200-2300 crore, ET reported.
Kedaara Capital has invested Rs 200 crore in the company in 2015 to buy about 25 percent stake held by another private equity firm, ChrysCapital.
Parksons, founded in 1996, is India’s largest independent folding carton manufacturer with a diversified product portfolio and 300 customers across consumer, food, pharmaceutical and other end-markets. Through its 6 state of the art manufacturing facilities across India, Parksons has the capacity to convert more than 1,25,000 MT of paper board annually.
Parksons’ major clients include Hindustan Unilever, McDonald’s India,
, Emami, Sun Pharmaceuticals, and Wockhardt.
“We have had a strong collaborative relationship with Kedaara in our growth journey over the past 6 years and now we are excited to partner with Warburg Pincus in our next phase of growth,” said Siddharth Kejriwal, Managing Director, Parksons.
“We believe that packaging is a great way to play the fast-growing consumption story in India. The paper packaging market is expected to demonstrate strong growth over the next five years, driven by underlying expansion in consumer end markets, further bolstered by secular tailwinds of sustainability and premiumization,” said Vishal Mahadevia, Managing Director and Head of India, Warburg Pincus.
Credit Suisse acted as the exclusive financial advisor to the sellers and its affiliates.
The packaging industry in India was valued at $75 billion in 2020, and it is expected to reach $205 billion by 2025, registering a CAGR of 26% during this period.
India’s per capita packaging consumption is 11 kg per year, as compared to 45 kg in China, 32 kg in Brazil, 110 kg in the US, 65 kg in Europe.
Major buyouts in Indian packaging industry include Blackstone‘s acquisitions of Piramal Glass in 2020 and Essel Propack in 2019.
PE fund Advent International had acquired Manjushree Technopack, India’s largest PET manufacturer in 2018.