Parksons Packaging hires Credit Suisse for majority stake sale, Kedaara’s exit – sources
22 April 2020
Mumbai-based packaging company Parksons Packaging has mandated Credit Suisse to help with a majority stake sale including an exit for private equity sponsor Kedaara Capital, two sources familiar with the matter said.
Mumbai-based packaging company Parksons Packaging has mandated Credit Suisse to help with a majority stake sale including an exit for private equity sponsor Kedaara Capital, two sources familiar with the matter said.
Founder Ramesh Kejriwal and family hold a majority stake in the target, Kedaara Capital owns a significant minority while the rest is held by IIFL Assets Management which came on board in early 2019, as per media reports. IIFL would stay invested in the company, the first source said.
Parksons Packaging is more likely to attract a foreign strategic buyer that would look for long-term bets in India, although bulge bracket private equity firms would also be eyeing the asset, both sources said. The promoters will also part with some of their stake in the deal, they added.
Kedaara Capital came onboard Parksons Packaging in 2015, with an investment of USD 31.8m, for an undisclosed shareholding acquired from India focused private equity firm ChrysCapital, which reportedly owned around a 25% stake, and also infused primary capital, this news service reported at the time.
Parksons Packaging is expected to attract healthy valuations despite the disruption and shutdown of its operations in wake of the coronavirus pandemic, the first source noted. Packaging is essential to client companies as well as supply chain and the firm will make a quick comeback once the crisis is contained, the source noted.
However, the timeline for the sale may be deferred as representatives cannot meet face-to-face owing the lockdown in India and other countries, the same source said. The business would also take at least four to six months to pick up and reach pre-COVID-19 levels, the source added.
Credit Suisse declined to comment. Parksons Packaging and Kedaara Capital did not respond to requests seeking comments.
Parksons Packaging for FY19 ending March reported net sales of INR 9.5bn (USD 124m) and EBITDA of INR 1.3bn, compared to net sales of INR 7.6bn and an EBITDA of INR 1.1bn in FY18, as per media reports.
Founded in 1996, Parksons Packaging has a pan-India presence with six manufacturing plants across Daman, Maharashtra, Uttarakhand, Andhra Pradesh and Assam. The company provides end-to-end packaging solutions like printed and laminated foldable cartons, among others, according to its website. Its clientele includes Hindustan Unilever, McDonald’s India, Godrej Consumer Products, Emami, Sun Pharmaceuticals, and Wockhardt among others, according to its website.
Elsewhere in the segment, in January Punjab-based moulded fibre packaging provider Mohan Fibre Products was acquired by Denmark-based Brodren Hartmann in a deal valued at around USD 18m, as announced. Last year April, Mumbai-based specialty packaging company Essel Propack’s majority stake was acquired by global private equity firm Blackstone for around USD 460m, as reported by media at the time.
