Mumbai-based Essel Propack, a manufacturer of laminated and seamless or extruded plastic tubes, has received its board approval to divest entire stake in its flexible packaging subsidiary Packaging India Pvt Ltd, to Amcor Flexibles India Pvt Ltd, a wholly-owned subsidiary of Australian packaging products maker Amcor, according to a stock market disclosure.
The deal will happen in cash and the enterprise value is Rs 165 crore ($26.1 million).
"The divestment of Packaging India is in line with our strategic decision to intensify focus on the core tube packaging business globally including India. This will help us strengthen our expertise in tube packaging business and deleverage," said Ashok Goel, vice-chairman and MD, Essel Propack.
Packaging India was founded in 1989 and offers rotogravure printing for flexible packaging laminate packaging in paper, film and foil and shrink-sleeve packaging. The company has manufacturing facilities in Pondicherry, Sitarganj (Uttarakhand) and Cuddalore (Tamil Nadu). It caters to the local market, apart from exporting to countries like Sri Lanka and Africa.
Packaging India's client portfolio includes Cadbury, Eveready, Britannia, General Mills, Godrej, Dabur, Henkel, Hindustan Unilever, Himalaya Drugs, ITC Foods and P&G.
The deal will help Packaging India to further grow and prosper in the flexible packaging space as part of Amcor.
For the full fiscal ended March 31, 2014, Packaging India posted revenue of about Rs 235 crore.
Mumbai-based Essel Propack (formerly Essel Packaging Ltd), a part of $2.4 billion Essel Group, manufactures laminated plastic tubes. The company caters to beauty & cosmetics, pharma & health and food categories globally. It has more than 2,600 employees in 25 countries and sells over 6 billion tubes every year.
Essel Propack's scrip last changed hands at Rs 141.10 each, up 5.38 per cent on BSE in a strong Mumbai market on Monday.
This will be the third acquisition by Amcor in India. Earlier in November 2013, it acquired the flexible packaging business of Parry Enterprises Ltd, which in turn is part of south-based Murugappa Group. Prior to that in March 2012, it had expanded its Indian operations after acquiring packaging firm Uniglobe Packaging Pvt Ltd for $20.7 million.