Warburg in pole position to acquire control of Parksons Packaging – ET

Parksons Packaging could be valued at Rs 2,200-2,300 crore by investor

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HP Indigo 30000 at Parksons’ Daman plant (Photo: PSA)| Parksons Packaging
HP Indigo 30000 at Parksons’ Daman plant

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.

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

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– Naresh Khanna

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