PAG Acquires Manjushree Technopack's Majority Stake for ₹8,400 Crore

Asia-Pacific based alternative investment firm PAG, office in Hong Kong has announced its plans to acquire a majority stake in Manjushree Technopack, India’s largest robust plastic packaging solution company. This acquisition, valued at ₹8,400 crore ($1 billion), marks PAG's largest deal in India and its third $1 billion transaction globally this year. This ₹8,400 crore ($1 billion) deal marks a phenomenal shift in ownership as PAG buys out the stake held by Advent International, a US-primarily based private equity company.

Advent International, which invested in Manjushree back in 2018, had considered a strategy route planned to exit through an Initial Public Offering (IPO). In August 2023, the corporation submitted a ₹3,000 crore IPO proposal and request to the Securities and Exchange Board of India (SEBI). However, Advent needed to opt for a direct sale to PAG beans by selling the shares, and because of this, the IPO plan was shelved in favour of a strategic sale to PAG. The decision on this aligns with a growing trend of companies leveraging private equity acquisitions for faster, guaranteed capital over the uncertainties of public markets. 

About Manjushree Technopack: A Market Leader

Manjushree Technopack became a strong leading contender that serves various industries including such as  food and beverages, pharmaceuticals, and personal care. Its sturdy presence across 21 locations in India underlines its scale and capacity potential to cater to diverse marketplace needs. Additionally along with over 110,000 clients, including marquee names such as Coca-Cola, PepsiCo, Britannia, Dabur, and ITC , the organization operates 20 manufacturing and production facilities nationwide. 

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Over the years, Manjushree has emerged a major participant in the packaging industry with end -to-end solutions. Its solutions are precisely tailored to meet the needs of main client manufacturers, making it a cornerstone of the country's speedy-developing and fast growing consumer goods sector.  Manjushree’s sales means operational revenue climbed from ₹1,467 crore in FY22 to ₹2,117 crore in FY24, demonstrating its robust increase trajectory.  

Manjushree Technopack IPO Details

Although the IPO has been placed on hold due to the strategic purchase due to this acquisition, in advance filings revealed that Manjushree Technopack had been supposed to offer shares at a face value of ₹2 each per share. The public issue was designed as an aggregate combination of a fresh issue worth ₹750 crore and an offer-for-sale (OFS) issue of as much as ₹2,250 crore, which would have been sold through AI Lenarco Midco Limited, an affiliate of Advent International.

The proceeds of the IPO have been planned for strategic goals, which include the compensation or repayment of ₹500 crore in notable outstanding debt to strengthen the business enterprise’s financial health. The funds were additionally earmarked to fuel inorganic growth via acquisitions and other strategic investments. Additionally, a portion of the raised capital became intended for general corporate purposes.

Advent International’s Exit Strategy

Advent International’s exit marks the result of the culmination of a five-year investment in Manjushree. The firm had to begin with the aim to monetize its stake through an IPO; however, in the end, it chose to sell to PAG, leveraging the latter’s strategic recognition focus and capital strength. This deal exemplifies how private equity players are locating various routes to realize returns in India's dynamic funding panorama. This Advent’s dual-track method takes into consideration both IPO and private sale routes. PAG emerged as the leading contender in advanced negotiations, and the sale has become the preferred path for realizing value.  

PAG’s Broader Investment Strategy

PAG has been actively making an investment in India’s high-growth sectors, with previous deals offered in companies like Nuvama Wealth Management, RK Pharma, and Acme Formulations. This acquisition of Manjushree aligns with PAG’s strategy of focusing on businesses with robust market positions and long-term increased growth potential.

Impact on the Indian Packaging Industry

This acquisition is expected to offer PAG a significant foothold in India's packaging industry which is projected to develop substantially in the coming years. For Manjushree, the deal allows leveraging PAG's extensive resources and expertise to amplify its market presence and enhance its operational capabilities. The transaction additionally highlights the attractiveness of India's growing marketplace to worldwide investors.

Conclusion

The acquisition of Manjushree Technopack by PAG for ₹8,400 crore ($1 billion) represents a sizable milestone in India’s rigid plastic packaging industry. This deal underscores the growing interest of global investors in India’s speedy and fast-evolving manufacturing sector, specifically in sustainable and innovative packaging solutions. PAG’s significant resources and strategic expertise, Manjushree is well-positioned to scale its operations, enhance its technological competencies, and extend its marketplace presence both domestically and across the world. 

Advent pivoted from its IPO plans to pursue a private sale, citing the robust offer from PAG as the better route for maximizing returns. This deal exemplifies how private equity players are finding diverse routes to realize returns in India's dynamic investment landscape.