Private equity major Blackstone is exploring options for a strategic review of its portfolio firm, EPL Ltd (formerly called Essel Propack), the world's largest speciality packaging firm, and has seen preliminary inbound interest from potential suitors, four persons in the know told Moneycontrol on the condition of anonymity.
"The considerations are at a very early stage and no formal sale process is ongoing, but if the strategic review proceeds post more than five years of investment, it would consist of a full stake sale via the M&A auction route, not a partial one," said one of the persons above.
A second person confirmed the above.
Blackstone, the promoter, holds a controlling stake of 51.47 percent in EPL and at the end of day's trade on October 30, the stake was valued at Rs 4,402 crore at current market price. The market cap of the firm stood at Rs 8, 544 crore. It's share price has risen by 48.43 percent in the last six months.
"The proposed transaction has seen early feelers coming in from both private equity firms as well as strategics. No advisor has been appointed as yet though," two other persons told Moneycontrol.
In September 2020, Blackstone sold 23 percent stake in Essel Propack via the block deal route for around Rs 1,850 crore ($252 million)
An email query sent to Blackstone and EPL remained unanswered at the time of publishing this article. This article will be updated as soon as we hear from the firms.
In April 2019, Blackstone committed up to $460 million to acquire a majority stake in EPL, as per an official announcement.
A closer look at EPL
For FY23-24, the company registered revenue and net profit of Rs 1,280.50 crore and Rs 176.30 crore, respectively.
According to its FY23-24 annual report, EPL provides sustainable solutions through 21 advanced manufacturing facilities across 10 countries: Brazil, China, Colombia, Egypt, Germany, India, Mexico, Philippines, Poland, and the USA.
"With an annual production of over 8 billion tubes, EPL manufactures one in every three tubes used in the oral care category across the globe. We are trusted by leading brands in Beauty & Cosmetics, Food, Pharma & Healthcare, and Home Care sectors," the report added.
EPL's MD and Global CEO Anand Kripalu said in the annual report, "We remain market leaders in Oral Care, and while building on this momentum, we aim to drive significant growth in Beauty & Cosmetics and Pharma. This year, our Non-Oral category grew by 8.1%, outpacing the 5% growth in Oral Care."
He added, " We are in a strong position today, evidenced by our consistent progress in recent quarters. Our strategic initiatives are guiding us towards achieving double-digit growth with a 20% EBITDA margin."
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