Japan’s Toppan Printing Co Ltd will pick up a 49% stake in Max Ventures and Industries Ltd’s speciality packaging films unit for about Rs 200 crore ($30 million), the Indian company said on Friday.
Max Ventures said in a stock-exchange filing that it will sell a 35.93% stake in Max Speciality Films Ltd to Toppan while the unit will issue fresh shares equivalent to a 13.07% stake to the Japanese investor.
The deal will help Max Speciality expand its manufacturing operations and benefit from Toppan’s global sales network, Max Ventures said. Toppan, which is a large global buyer of biaxially oriented polypropylene products that Max Speciality makes, will also become a customer of the Indian company.
The deal will provide Max Speciality global market access and technological support to drive long-term growth in new and existing markets, said Sahil Vachani, managing director at Max Ventures.
Established in 1900, Tokyo-based Toppan has a market value of $6.8 billion and operates in sectors including information and communication, electronics and packaging.
Max Speciality has been expanding over the past 12 to 18 months. Its board last year approved an investment of Rs 250 crore to set up it’s a new manufacturing line that will help augment production capacity by 60% to 70,000 tonnes a year. A substantial portion of the proceeds from this transaction will be used for on-going capacity expansion, the company said.
The transaction will help Max Ventures increase its treasury corpus to Rs 290 crore, including the capital infusion of Rs 148 crore from its promoters and a New York Life subsidiary announced last month. New York Life acquired 22.51% of Max Ventures for Rs 121 crore.
Toppan joins the long list of the Analjit Singh-led Max Group's foreign partners that already include Japan’s Mitsui Sumitomo Insurance, South Africa’s Life Healthcare and Bupa Finance from the UK.
Max Ventures is the newest entity in the Max Group. It came into existence after the group was demerged into Max Financial Services Ltd, Max India Ltd and Max Ventures.
Max Ventures has four business verticals—Max Speciality (manufacturing), Max Estates (real estate), Max Learning (education) and Max I, which supports high-potential startups.
Investors in Max Ventures include International Finance Corporation, the World Bank’s private-sector arm. Shares of Max Ventures on Friday gained 2.5% to close at Rs 82.30 in a flat Mumbai market.
Max Group recorded consolidated revenue of Rs 14,237 crore in 2015-16. The group counts global financial institutions such as Goldman Sachs, KKR, Fidelity, Nomura and Invesco among its investors.
Ambit Capital acted as the financial adviser to Max Ventures and Max Speciality. Daiwa acted as the financial adviser to Toppan. AZB & Partners acted as the legal adviser to Max Ventures and Shardul Amarchand Mangaldas advised Toppan.
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