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, outbidding peers such as KKR and Bain Capital besides Finnish packaging materials major Huhtamäki Oyj, according to a report in the Economic Times.
A potential deal with Warburg will value the Mumbai-based packaging solutions company at Rs 2,200-2,300 crore, multiple people aware of the development told ET. The transaction will see the exit of private equity firm Kedaara Capital from the company founded by Ramesh Kejriwal.
Kedaara had invested Rs 200 crore in the company in 2015 to buy about 25% stake held by another private equity firm ChrysCapital. Warburg’s fourth investment in India will be in the last six months if the deal goes through.
Kejriwal’s sons Siddharth and Chaitanya will continue to run the business by holding a minority stake post transaction, one of the sources told the newspaper. Parksons reported 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 corporate affairs.
Parksons Packaging today boasts of six plants across five locations in India. In 2019, the company became the first in India to commission HP Indigo 30000 digital press at its Daman plant. It is the oldest plant that came online in 2001.
This is the first digital press that Parksons Packaging has commissioned and is also the first B2-format (20×30-inch) digital press in the Indian folding carton industry.
In addition to the HP Indigo 30000, Parksons Packaging operates a battery of offset presses and finishing equipment across its plants. Late last year, it commissioned a newly installed Rapida 76.