American private equity firm Warburg Pincus is likely to have emerged as the highest bidder to acquire a controlling stake in Mumbai-based folding carton manufacturer Parksons Packaging. It is said Warburg Pincus outbid peers such as KKR and Bain Capital apart from the well established in India, global packaging major Huhtamäki Oyj, according to a report based on “multiple people aware of the deal” in the Economic Times.
Warburg’s potential deal will value the Mumbai-based packaging solutions company at Rs 2,200-2,300 crore, sources aware of the development told ET. The report indicates that the transaction will see the exit of private equity firm Kedaara Capital from the company founded by Ramesh Kejriwal in 1996.
Kedaara is said to have invested Rs 200 crore in the company in 2015 to buy about 25% stake that another private equity investor, ChrysCapital, held. The investment in Parksons Packaging will be Warburg’s fourth investment in India in the last six months if the deal goes through.
Kejriwal’s sons Siddharth and Chaitanya will continue to run the business and hold a minority stake post transaction, one of the sources told the financial daily. Parksons reported a revenue of Rs 946 crore during the fiscal year 2018-2019, while net profit stood at Rs 39.51 crore. According to ET, the company has not filed the numbers for the fiscal year 2019-2020 yet with the ministry of corporate affairs.
Parksons Packaging, headquartered in Mumbai, currently operates six monocarton packaging plants across five locations in India. In 2019, the company became the first in India to commission an HP Indigo 30000 digital press at its Daman plant. Daman is the first and oldest monocarton plant. Other plants are in Chakan near Pune, also in Western India, Pantnagar in North India, Sri City near Chenna in South India, and Guwahati in Northeast India.
Parksons Packaging operates a battery of offset Heidelberg, and KBA offset presses and modern converting and finishing equipment across its plants. Late last year, it commissioned a newly installed Rapida 76. It also became the first monocarton printer to commission the HP Indigo 30000, a B2-format (20 x 30-inch) in the country.
