Blackstone sells 23% stake in Essel Propack

MUMBAI: The US based private equity major Blackstone has sold about 23 per cent stake in Essel Propack Ltd (EPL), the leading speciality packaging company, in a deal worth $252 million (Rs 1850 crore), on Friday.

About 20 marquee funds, including Morgan Stanley, Neuberger Berman, Franklin Templeton, Axis MF, IDFC, IFL, Nomra, Macquarie and Ashmore have acquired the EPL stake from Blackstone.

Blackstone has made the part exit on Friday by selling company’s shares at Rs.256.5 per share. Blackstone will continue to own 52 per cent in EPL.

In August last year, Blackstone had acquired about 75 per cent stake in Essel Propack in a deal worth $460 million (Rs 3,200 crore).

The deal implies a 106 per cent IRR and a 2.2x multiple of money in US dollar on Blackstone’s equity, net of debt at holding company, said the statement.

"The transaction was executed to create liquidity in the stock given significant investor interest after company’s strong performance. Also, these 23 per cent shares came in the Open Offer last year which now have been sold back to global and domestic investors," said a Blackstone spokesperson.

Essel Propack is world’s largest manufacturer of laminated tubes. Following Blacksone's part exit, shares of EPL went down by 7.7 per cent to close at Rs.251.9 on BSE.

Blackstone had paid Rs 134 per share to acquire a 51 per cent shareholding from Ashok Goel Trust, the founder-promoters of the company. Goel had retained 6 per cent stake. Later, the PE fund acquired additional stake through an open offer.

Established in 1982, Essel Propack is run by Ashok Goel, brother of Subhash Chandra of the Essel Group. Its 20 facilities in 10 countries employ more than 3,100 people and it manufactures 7 billion tubes annually. Clients include marquee global brands in the oral care, beauty, cosmetics and pharmaceutical industries such as Olay, Lacura, Emami, Garnier and L’Oreal.

With $512 billion in assets under management, Blackstone has a strong presence in India. The fund has deployed about $10 billion through private equity and real estate investments, including Mphasis, Intelenet, IBS Software and Aadhar Housing Finance Limited.

The packaging sector in India remains a significant investment area for global PE funds. In 2018, Advent International had acquired a majority stake in Manjushree Technopack, India’s largest rigid plastic packaging solution provider, valuing the company at Rs 2,300 crore.