JK Paper Ltd, part of the Singhania family-led JK Group, has agreed to acquire animal nutrition products maker Quadragen VetHealth Pvt. Ltd in a bid to diversify its business beyond paper and packaging products manufacturing.
JK Paper, one of the leading paper manufacturers in India, said in a stock-exchange filing it will initially acquire 65% of Quadragen for about Rs 300 crore in cash and the remaining 35% within the next four years.
The deal pegs Quadragen’s current equity value around Rs 460 crore and its enterprise value, which takes into account the company’s debt and cash balance, at around Rs 390 crore, a JK Paper executive told VCCircle.
Quadragen manufactures animal health and nutrition products for poultry, pets, equine, swine, and dairy. Some of its products include feed ingredients and additives, vitamins, and mineral premixes. In 2023-24, Quadragen’s revenue increased by 7% to Rs 151.96 crore. Net profit jumped 39% to Rs 35.4 crore.
In its exchange filing, JK Paper said this acquisition is a “new opportunity for the company to grow”. Indeed, the paper manufacturer has been trying to diversify from its core paper manufacturing business with inorganic growth.
In October 2023, it acquired packaging company Manipal Utility Packaging Solutions Pvt. Ltd. for Rs 90 crore. Thereafter in December last year, it embarked on merging its packaging subsidiaries—Horizon Packs Pvt. Ltd., Securipax Packaging Pvt. Ltd. and JKPL Utility Packaging Solutions as a consolidation and restructuring exercise.
Also in December last year, the company acquired a 60% stake in Radhesham Wellpack Pvt. Ltd for about Rs 63 crore. It will buy the balance 40% within two years, it said at the time. Radhesham manufactures corrugated boxes, corrugated sheets and other corrugated packaging products.
Singhi Advisors advised JK Paper on the latest transaction.
Meanwhile, the JK Paper board also approved the financial results for the quarter ended December. JK Paper’s net profit tumbled 72% to Rs 65.39 crore from Rs 235.11 crore a year earlier. Revenue fell around 4% to Rs 1,631.99 crore.
Reacting to the earnings, shares of JK Paper were trading down 6% at Rs 358.45 on the BSE.