Blackstone makes $253m part-exit from India's Essel Propack
The Blackstone Group has made a partial exit from Indian packaging manufacturer Essel Propack (EPL) – which provides the tubes to 40% of the world’s toothpaste – generating proceeds of INR18.6 billion ($253.4 million).
The private equity firm sold approximately 72.6 million shares for INR256.44-256.49 apiece, according to stock exchange data. Its stake in EPL has fallen from 75% to 52%. Most of the shares were picked up by institutional investors and mutual funds.
A Blackstone spokesperson told VCCircle that the partial exit was intended “to create liquidity and increase the public float in the stock given strong investor interest in the company.” They added that it was the single-largest block trade in percentage terms in India’s capital markets.
The private equity firm agreed to pay up to INR32.1 billion ($461 million) for a controlling stake in EPL in April 2019. Ashok Goel sold a 51% stake to Blackstone, triggering a mandatory open offer for a further 26%. The deal was intended to transform the company from an Indian player with overseas interests to a truly multinational business.
Founded in 1982, EPL is the world’s largest producer of laminated tubes, used to hold a wide range of liquids and gels including toothpaste, face wash, cosmetics, and pain relief creams. Customers include marquee brands like Colgate, Palmolive, and L’Oreal. It has 20 factories in 10 countries, covering Asia, Europe, the Middle East, and the Americas.
The company’s packaging is used by both premium and lower-end consumer brands, which means success is tied to the growth of the personal care and cosmetics market in general rather than any particular segment. This is most clearly visible in the geographic distribution of performance, where its strongest growth in recent years has been in places where premium brand penetration is lower.
“This company is growing its revenue by more than 10% per year, but if you break that down, it’s a combination of single-digit growth in developed markets, and high double-digit growth in emerging markets,” Amit Dixit, a senior managing director for private equity in India at Blackstone, told AVCJ last year. “We want to play into the growth that is already happening, which is due to both newer premium products being introduced in these markets and higher penetration of existing products.”
For the 12 months ended March, revenue came to INR27.6 billion, up from INR27.1 billion the previous year. EBITDA rose 11.7% year-on-year to INR5.6 billion, while net profit jumped 7.7% to INR2.1 billion.
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