Advent explores dual-track exit for Manjushree Technopack, eyeing IPO, sale to PEs

Big-bang parallel sale at Advent-promoted IPO aspirant Manjushree Technopack: Brookfield, Carlyle, PAG & Permira in fray

Advent International is pursuing a dual-track exit strategy for portfolio company Manjushree Technopack Ltd, with the private equity firm simultaneously exploring both public listing and private market options to unlock value in the packaging firm, three people in the know told Moneycontrol on the condition of anonymity.

"A clutch of global funds, including Brookfield Asset Management, Carlyle, PAG, Platinum Equity and Permira Private Equity, are among suitors that have submitted non-binding bids to acquire IPO-bound Manjushree Technopack. For now, both the listing and stake sale options are on the table," said one of the people cited above.

To be sure, a dual track process is a deal strategy in which the owner of the firm simultaneously pursues an initial public offering (IPO) as well as a private M&A auction process till the former finalises one option based on its needs, valuations and market conditions.

Advent International, which holds around 98 percent of Manjushree Technopack, is targeting a premium valuation in the range of $1.2 bn to $1.8 bn for the portfolio firm, which claims to be the largest rigid plastic packaging (RPP) player in terms of installed capacity in India, this person added.

Earlier this week, Manjushree Technopack filed draft papers with Sebi for a Rs 3,000-crore IPO (fresh issuance of Rs 750 crore and an offer for sale worth Rs 2,250 crore by promoter Advent International). The proceeds will be used for inorganic growth and debt repayment along with general corporate purposes, the draft papers said.

On December 1, Moneycontrol was the first to report that Advent International was exploring both the public float and sale route for India's largest rigid plastic packaging firm Manjushree Technopack, after picking up a controlling stake in October 2018.

On December 19, Moneycontrol reported that Goldman Sachs and Avendus Capital were given a joint mandate to conduct the sale process.

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According to the second person, "Within the next 7-10 days, a shortlist of suitors is likely to be taken to the next stage for due diligence."

A third person confirmed the receipt of the initial bids and said Advent would take a call on the preferred exit route at a later stage, depending on final valuations and market sentiment.

"If they get a good deal, they may choose to withdraw the draft papers. In a M&A, it's a full exit in one shot, while in an IPO, Advent will still be left with a chunky stake post dilution," the third person elaborated.

Spokespeople for Advent International, Brookfield Asset Management, Carlyle and Permira declined to comment. Spokespeople for PAG and Platinum Equity did not immediately respond to a request seeking comment.

Manjushree Technopack has sealed a string of acquisitions since the entry of Advent and, in April, purchased Oricon's plastic packaging business for Rs 520 crore.

Manjushree Technopack: A closer look at the suitors

Earlier this year, Brookfield Asset Management was in the final leg along with other suitors to acquire Blackstone-backed glass manufacturing and packaging firm PGP Glass Pvt Ltd (formerly called Piramal Glass), but the deal went cold.

Incidentally, current Carlyle India head Amit Jain sat on the board of Essel Propack during his earlier stint at Blackstone, which acquired a majority stake in the packaging company for up to $460 million in 2019.

UK-based Permira Private Equity is a relatively new global fund in the Indian market. The firm announced the appointment of former Warburg Pincus executive Siddharth Narayan as India head along with its on-the-ground presence in Mumbai in October 2022. In March 2023, Permira disclosed the final close of its latest flagship buyout fund, Permira VIII, with total capital commitments of €16.7bn.

Moneycontrol was the first to report the move by Siddharth Narayan.

Asian private equity major PAG has invested in Indian firms such as Nuvama, Acme Formulation Anjan Drugs, Optimus Drugs and RK Pharma.

Platinum Equity is an American private equity firm that manages diversified assets worth more than $48 billion across the globe with an exposure to portfolio firms in the industrial sector, according to its website.

According to its draft papers, Manjushree Technopack is a derivative of the consumer industry, given its presence in the end industries such as food and beverages, home care, personal care, alco-beverage, paints and adhesives, pharmaceuticals, nutraceuticals, dairy and agrochemicals.

"With the highest market share in terms of revenue of 7.4 percent in FY23 in the organised consumer RPP industry in India, the company serves a marquee customer base including Varun Beverages, Dabur India, Marico, Honasa Consumer, Hershey India, Kansai Nerolac Paints, Pernod Ricard, and Parag Milk Foods," the draft papers add.