PAG in talks to raise $375 million debt to finance $1-billion Manjushree buyout

The company’s revenue grew at a CAGR of 20.13% from Rs1,467 crore to Rs 2,117 crore between Fiscals 2022 and 2024.

Private equity firm PAG is in talks with at least five lenders to raise $375 million in debt funding to finance its acquisition of packaging company Manjushree Technopack, which it is acquiring at a valuation of around $1 billion, sources have told Moneycontrol.

“PAG is looking to raise around $335-375 million for the buyout of Manjushree and discussions are ongoing with around five foreign banks, including Goldman Sachs,” one of the sources cited above said. “The terms of the loan facility and the final lender syndicate are expected to be finalised soon.”

Private equity firms regularly use debt to acquire companies to improve their returns. These transactions are called leveraged buyouts (LBO).

Asia Pacific-focused PAG on January 13 announced signing definitive documents to invest in Manjushree Technopack, India’s largest rigid plastic packaging company.

On the same day, the PE firm also announced that it acquired a majority stake in Pravesha Industries Private Ltd, a packaging firm focused on the pharmaceutical industry.

Moneycontrol reported on January 13 that the Manjushree Technopack deal valued the firm at $1 billion, while the controlling stake in Pravesha Industries was sealed at an enterprise value of $200 million.

PAG and Goldman Sachs declined to comment.

Manjushree Technopack financials

Manjushree is one of the largest rigid plastic packaging players in India in terms of installed capacity. It provides various packaging products such as containers, preforms, caps and closures, pumps and dispensers.

Its customers include a range of industries such as food and beverages, home care, personal care, alco-beverage, paints and adhesives, pharmaceuticals, nutraceuticals, dairy and agrochemicals.

Manjushree’s customers include Varun Beverages, Dabur, Marico Limited, Honasa Consumer, Hershey India, Kansai Nerolac Paints, Pernod Ricard and Parag Milk Foods.

The company’s revenue grew at a CAGR of 20.13 percent from Rs 1,467 crore to Rs 2,117 crore between FY22 and FY24.

Its earnings before interest, tax, depreciation and ammortisation came in at Rs 382.8 crore in FY24, up from Rs 301.1 crore in the previous year.

Profit grew to Rs 140.7 crore in FY24 from Rs 59.2 crore in the previous fiscal.

Pravesha, founded in 1999, produces more than 15,000 metric tons of plastic bottles, closures and drums and more than two billion units of cartons, labels and leaflets annually for some of the world’s largest pharmaceutical companies.

About 95 percent of Pravesha’s packaging products are used in developed markets including the US and Europe.

PAG manages over $3 billion in assets in India. Its other private equity investments include Nuvama Wealth Management, one of India’s largest wealth management players; Sekhmet Pharmaventures, a leading diversified pharmaceutical platform, and Acme Formulations, a leading contract development and manufacturing outsourcing company.