INDIA – Indian paper and packaging board company JK Paper has agreed to acquire 85% of the shares of Horizon Packs (HPPL) and Securipax Packaging (SPPL) for around Rs5.78bn (US$70.68m).
JK Paper will acquire 269.2 million equity shares in HPPL, paying Rs19.33 (US$0.24) for every Rs10 (US$0.12) share.
The company will also buy 463,000 SPPL equity shares for Rs1,256.95 (US$15.36) to a share, with each share worth Rs100 (US$1.22).
JK Paper says that the shares represent an 85% stake in each firm. It will acquire the remaining 15% of the two companies within three years.
HPPL and SPPL are manufacturers of corrugated packaging in India, operating a total of seven plants across the country.
The two companies had a consolidated revenue of Rs8.32 billion (US$101.70 m) for the fiscal year 2021-22.
They are not subject to any governmental or regulatory approvals.
The packaging firm said that the deals are in synergy with the expanding packaging sector and the corrugated packaging arm of its subsidiary. They will also expand the corrugated packaging business in terms of volume and market.
JK Paper Vice Chairman and Managing Director Harsh Pati Singhania said: “It is a privilege to join hands with India’s largest player in the Corrugated Packaging segment.
“This, together with JK Paper’s upcoming corrugated facility in Ludhiana, will establish it as the largest player in the corrugated packaging industry.
“The shift in consumer preferences is driving demand for superior quality, eco-friendly packaging. This acquisition gives us an opportunity to benefit from the existing strengths of HPPL and SPPL.
“HPPL and SPPL’s customers, employees, vendors and partners will benefit from JK Paper’s strong manufacturing knowledge and experience, its high standards in operational excellence, financial management and corporate governance.”
Based in New Delhi, JK Paper supplies fully bio-degradable and recyclable paper packaging for clients in more than sixty countries.
The country’s domestic distribution network has more than 350 trade partners, 4,000 dealers, fifteen depots and four regional marketing offices.
Earlier this year, JK Paper began commercially manufacturing packaging boards at its new facility at Unit CPM, Gujarat.
Built with a US$195.3 million (Rs14.5bn) investment, the plant will provide 200,000t of additional production capacity a year, upscaling the company’s total annual capacity from 455,000t to 625,000t.
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