Graham Packaging, a company owned private equity major Blackstone, has acquired a minority stake in container manufacturing firm PPI Blowpack. US-based Graham Packaging is a manufacturer of plastic containers for food and beverage items, automotive lubricants, etc. The company had sales of $2.49 billion in 2007. The deal size has not been disclosed and the finalized agreement is expected to be signed in March.
Mumbai-based PPI Blowpack has been manufacturing rigid plastic containers for the food, pharmaceutical, chemical, and fast-moving consumer goods markets. The rigid plastic container sector haws been growing at a rate of 15-20% annually.
The deal would help Graham establish a presence in India, which is one of the few economies in the world which is presently showing significant growth. The deal would also allow PPI Blowpack an access to Graham’s technology, which will help it expand its presence in the country.
“We think that with Graham Packaging as our partner we can extend our growth much farther that we could otherwise,” said PPI Blowpack Executive Director Puneet Deora. The company’s founder is Prahlad Deora. One World Resources acted as the financial advisors to PPI Blowpack in this transaction.
Graham Packaging was acquired by Blackstone in 1998. The company agreed to a reverse merger last year with Hicks Acquisition, a special purpose acquisition company. Blackstone continues be the largest shareholder in the company. Graham produces more than 20 billion container units annually and has 83 plants in North America, Europe, and South America.
There has been some private equity interest in this space. Ess Dee Aluminium , an aluminium foil-based packaging company, raised Rs 91 crore from Morgan Stanley by selling a 5% stake in 2007. Jindal Poly Films, a manufacturer of flexible packaging films, raised Rs 56 crore from SAIF Partner in 2006. Then there are several paper packaging companies like Print-o-Pac Ltd (Blue River Capital) and Parkson Packaging (ChrysCapital) which have also raised funding.