The promoters of Delhi based multi-national packaging firm Polyplex Corporation which has the fifth-largest capacity of polyester (PET) film globally are in exit mode and have engaged advisers to explore the potential sale of a controlling stake, sources with knowledge of the matter told Moneycontrol.
“Polyplex Corporation has mandated investment bank Goldman Sachs and is evaluating the sale of a controlling stake in the company. Demand has risen sharply in all segments of the packaging sector post the outbreak of COVID-19 with profits and capacity utilization going up,” said one of the individuals cited above adding that the plans may or may not fructify into an eventual transaction.
“Polyplex is a well-run, well-governed company. It has a lot of value-added products and a global presence with a strong set of customers. Private equity funds are likely to express interest in the proposed transaction,” added a second individual.
At the end of trading hours on April 13, Polyplex had a market cap of Rs 2, 469 crores. According to the shareholding pattern, the promoters hold a 50.97 percent stake. The firm’s overseas investments have been made via a listed subsidiary it owns in Thailand, namely Polyplex Thailand. It also has subsidiary in Singapore.
A third individual also confirmed the sale plans of the firm, adding that it may be possibly linked to succession planning as well, over and above the buoyancy in the sector.
“Due to disruptions in the global supply chain, film prices have gone up a lot. This is a good time to monetise and Polyplex has an attractive product portfolio and a professional management in place, “ said a fourth individual who tracks the packaging sector.
All the four individuals above spoke to Moneycontrol on the condition of anonymity.
In response to an email query from Moneycontrol, Polyplex Corporation responded saying, “As a matter of policy, the company does not comment on speculations or market rumors.”
Goldman Sachs declined to comment.
POLYPLEX CORPORATION: THE LATEST M&A TARGET IN PACKAGING?
Being one of the leading PET Film manufacturers, Polyplex operates close to its key regional markets, with manufacturing and supply points across the world. It run’s integrated manufacturing & distribution operations in six countries viz. India, Thailand, Turkey, USA., Indonesia & Netherlands. The firm supplies to about 1900 customers in 83 countries across Europe, the Americas, the Indian sub-continent, Far East, Asia Pacific and the Middle East.
It’s polyester capabilities include both thin and thick PET film in a wide range of thickness and surface properties covering multiple applications. Polyplex has a diversified business portfolio which also includes BOPP, Blown PP/PE and CPP films produced in state of the art plants. Integrated downstream capabilities of metallising, holography, silicone coating, offline chemical coating, extrusion coating and transfer metallised paper deliver further value-added products. In FY9-20, the firm had revenues of Rs 1272 crores and a net profit of Rs 229 crores.
The diversified product portfolio caters to thermal lamination products like book covers, identity cards, carton lamination and wide format commercial films. It also has applications in labels, tapes, roofing shingles & peel & stick underlayments and covers the digital print media segment for photo album, general commercial printing, promotional & customised digital printing, mini-offset printing, label and flexible packaging applications.
DEAL ACTVITY IN PACKAGING SEGMENT
The packaging industry has seen a lot of m&a action since private equity fund Advent International gave an exit to Kedaara Capital and purchased a controlling stake in Manjushree Technopak in 2018. According to reports, the transaction valued India’s largest rigid plastics manufacturing company at over Rs 2,400 crores. Since then Manjushree Technopak has gone on to acquire Pearl Polymers & National Plastics.
In April 2019, Blackstone acquired specialty packaging company Essel Propack for upto $460 mn and later made a part exit by selling 23 percent in September 2020.
In late 2020, in the largest ever transaction involving an Indian packaging company, Blackstone acquired glass packaging manufacturer Piramal Glass at a valuation of $1bn.
Recent reports indicate Parksons Packaging, India’s largest independent folding carton maker, is also on the block and Jindal Poly Films is looking to raise funds via a minority stake sale.
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