PAG seals mega $850 mn-$950 mn deal to acquire Advent-backed Manjushree Technopack; IPO plans dropped

PAG seals mega $850 mn-$950 mn deal to acquire Advent-backed Manjushree Technopak; IPO plans dropped

Asia-focused private equity firm PAG has signed definitive agreements to acquire a substantial majority stake in Advent International- promoted Manjushree Technopack, in a transaction with an enterprise value around $850 million-$950 million for the entire packaging solutions firm, multiple industry sources in the know told Moneycontrol.

These sources added that the US investment major has dropped plans for an initial public offer for Manjushree Technopack, which received the Sebi nod for the proposed Rs 3,000-crore public float on November 12.

On November 8, Moneycontrol was the first to report that PAG had held advanced discussions and emerged as the front-runner to buy a controlling stake in Manjushree Technopack, even as the IPO route was also being considered by Advent as part of a dual track process.

"The agreement between both parties has been signed. This is the biggest deal yet for PAG in India post the acquisition of a controlling stake in Nuvama ( formerly Edelweiss Wealth Management)," said one of the persons quoted above.

In March 2021, PAG made an investment of $325 million in Edelweiss Wealth Management ( now Nuvama) which included a primary and secondary component.

According to a second person, "Valuations would have been a key factor but via the sale route, Advent International will get a clean exit in one shot after six years of investment, as compared to the longer listing process, post which it would have been left with a chunky stake after dilution. Plus the lock-in period also has to be kept in mind."

Advent International holds 97.54 per cent in Manjushree Technopack.

"Goldman Sachs, Avendus Capital, Deloitte and law firms Khaitan & Co and AZB & Partners acted on this deal," two other people familiar with the deal added.

The four persons cited above spoke to Moneycontrol on the condition of anonymity.

When contacted, Advent International, PAG, Avendus Capital and Deloitte declined to comment.

Email queries have been sent to Goldman Sachs, AZB & Partners and Khaitan and Co and Moneycontrol could not elicit an immediate response from them. This article will be updated as soon as we hear from the parties.

Moneycontrol had also named PAG as one of the multiple private equity suitors for the sale process on August 23.

Advent International was considering a dual track process to unlock value in portfolio firm Manjushree Technopack. 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.

Manjushree Technopack had filed draft papers for a Rs 3,000-crore IPO in August, a combination of fresh issuance of Rs 750 crore worth equity shares, and an offer-for-sale (OFS) of equity shares worth Rs 2,250 crore by the promoter AI Lenarco Midco( Advent International).

In October 2018, Advent invested in Manjushree Technopack in partnership with the founding Kedia family. As part of the transaction, Advent purchased all the shares owned by investor Kedaara Capital and a portion of the Kedia family’s stake in Manjushree Technopack. Back then, reports said the deal valued the firm between Rs 2,300 crores to Rs 2,440 crores.

On December 1, 2023, Moneycontrol broke the news that Advent was exploring strategic options to unlock value in Manjushree Technopack.

A closer look at PAG

PAG is a leading Asia-Pacific-focused alternative investment firm with three core businesses: Real Assets, Credit & Markets and Private Equity. It manages over $55 billion in capital on behalf of nearly 300 global institutional investors. The firm has over 790 staff across 15 key offices globally. PAG Private Equity manages four pan-Asian buyout funds and two growth funds with $19 billion of capital under management.

PAG has now deployed over $1.7 billion in India since founding the office in 2019.

The Manjushree Technopack transaction marks PAG’s seventh private equity investment in India, an indication of its expanding commitment to the country. Other private equity investments include Acme Formulations, a leading contract development and manufacturing outsourcing (CDMO) company; RK Pharma Inc, a vertically integrated complex injectables CDMO company; and Sekhmet Pharmaventures, a leading diversified pharmaceutical platform.