Mumbai: Homegrown private equity (PE) firm Kedaara Capital exited its investment in Manjushree Technopack, selling its entire 40% stake to Advent International, according to a joint statement by the firms on Thursday.
As part of the deal, Advent has also acquired a portion of the promoter family’s holdings to gain a majority stake in the Vimal Kedia-founded, Bengaluru-based company. Kedia and his senior management team will continue to be “closely involved” in the business.
The details of the transaction were not disclosed, but two people close to the development said the deal valued the PET bottle and preform manufacturing company at ₹ 2,440 crore.
Kedaara had invested around ₹150 crore in the company in 2015. “The exit offers 6-times returns to Kedaara,” one person mentioned above said, requesting anonymity.
On 24 May 2018, Mint had first reported that Kedaara had hired Citigroup to chart out its exit from Manjushree, which is South Asia’s largest PET bottle and preform manufacturing company.
Spokespersons for Kedaara and Advent declined to comment.
“The rigid plastic packaging market is expected to expand by 15% per year over the next five years, driven by underlying growth in consumer-end markets, the continued shift from glass and paper to plastic packaging, and the introduction of new products. Manjushree Technopack is the market leader in an industry with strong growth tailwinds,” said Shweta Jalan, managing director and head, India, Advent International.
Manjushree Technopack reported a turnover of ₹890 crore in 2017-18. With seven facilities across India, the firm’s manufacturing capacity stands at 150,000 mt per annum.
Its clients include Coca-Cola, PepsiCo, Mondelēz, Reckitt Benckiser, Dabur, L’Oréal, Unilever, Nestlé, Heinz, Tata Global and Marico.
It caters to a host of sectors, such as edible oil, pharma, personal care products and food and beverages.
“During our investment term, the business continuously outgrew the Indian consumer and packaging sector, and generated significant value for Kedaara and its investors. It is today positioned to further strengthen its dominance as India’s largest rigid plastics packaging solution provider,” said a Kedaara Capital spokesperson.
During the investment term of Kedaara, Manjushree acquired Delhi-based packaging firm Varahi Ltd for an undisclosed amount in November 2016. The acquisition was made to enable the firm to expand its production capacity and customer base, and strengthen its foothold in North India. Besides Manjushree, Kedaara has investments in another packaging firm, Parksons Packaging Ltd, the country’s largest independent maker of folding cartons and paper packaging.
Kedaara was started in 2011 by Manish Kejriwal, Sunish Sharma and Nishant Sharma. Some of Kedaara’s investments include Mahindra Logistics, AU Small Finance Bank, Vedant Fashions and Spandana Sphoorty Financial Ltd. In May, the company had said that it will be buying Vishal Mega Mart Pvt Ltd along with Partners Group.
US-based Advent’s India investments include Dixcy Textiles, a leading innerwear brand, ASK Group, a wealth and investment management business, QuEST, a global engineering solutions provider, and Crompton Greaves Consumer Electricals.
“We see significant opportunities to accelerate Manjushree’s growth by investing in innovation and new business development, expanding into adjacent geographies, segments and business lines, and acquiring other packaging companies,” said Pankaj Patwari, a director at Advent International.