Transaction:
- Asia-focused PAG, a leading alternative investment firm, acquired a majority stake in packaging firm Pravesha Industries at an enterprise value of $200 million (about ₹1,734 crore).
- PAG has acquired a little over 80% for Rs 1,387 Crores from the promoters Bomma Sivaprasad Reddy and RPR Sons Advisors.
About Pravesha Industries Private Limited:
- Incorporated in 1993 as Pravesha Tools Private Limited, the company was initially engaged in manufacturing reactors. The company changed its name to the current nomenclature of Pravesha Industries Private Limited in October 2004.
- PIPL is engaged in providing integrated primary and secondary packaging solutions requirements for pharma, food, cosmetics, and other industries. The company has been promoted by B Siva Prasad Reddy and M/s RPR Sons Advisors Private Limited (RPR) who are closely related to Aurobindo Pharma’s promoter group, which is one of the leading pharma groups in India.
- The company has six manufacturing facilities across the country, It annually produces over 15,000 metric tons of plastic bottles, closures, and drums, along with two billion units of cartons, labels, and leaflets.
- Approximately 95% of its products are exported to developed markets such as the US and Europe.
About PAG (previously known as Pacific Asian Group):
- Hong Kong based private equity fund PAG currently manages $55 billion in assets, globally across real assets, credit, and private equity.
- The firm’s private equity business oversees $19 billion in assets across the Asia-Pacific region.
- Since 2020, PAG has invested $1.5 billion in private equity across seven deals in India, including stakes in Nuvama Wealth Management, Sekhmet Pharmaventures, and Acme Formulations.
Rationale:
- Pravesh Industries Reported revenue for FY24 at Rs 583 Crores, with an EBITDA of Rs 143 Crores and PAT of Rs 91 Crores.
- The current acquisition shows PAG’s focus to capitalize on India’s growth potential in pharmaceutical packaging sector, driven by strong export demand.
- PAG has also acquired majority stake in Manjushree Technopack, India’s largest rigid plastic packaging firm, for $ 1 Billion.
- With India’s packaging industry expected to grow at double-digit rates over the next decade, it is positioning itself as a key player in this space.
- PAG has been investing in India since 2009 across multiple strategies and business sectors and currently manages over $3 billion in assets in India.
- PAG’s other private equity investments include Nuvama Wealth Management, one of India’s largest wealth management players; Sekhmet Pharmaventures, a leading diversified pharmaceutical platform; and Acme Formulations, a leading contract development and manufacturing outsourcing (CDMO) company
Acknowledgements:
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
Disclaimer:
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