SRF Ltd, a Gurugram-based industrial and specialties intermediates conglomerate, will acquire one of the non-core packaging divisions of Kanpur Plastipack Ltd.
SRF will acquire the cast polypropylene (CPP) film division from Kanpur Plastipack for Rs 49.25 crore ($5.6 million), enabling its foray into the CPP business, according to a stock-exchange filing.
Kanpur Plastipack is a manufacturer and exporter of flexible intermediate bulk containers and jumbo bags that are used for hauling and storing flowable items in industries. The CPP division was a “non-core business”, the company said.
Kanpur Plastipack will use the entire proceeds from the sale to repay the outstanding term loans on these assets, reducing its debt burden, the company said in a statement.
Mumbai-listed SRF, which counts the sovereign wealth funds of Singapore and Norway as its shareholders, will acquire the plant, machinery and spare parts related to CPP films. It will then relocate the assets to its Indore facility.
CPP is a more durable and flexible packaging material widely used in the fast-moving consumer goods, pharmacy, and automotive sectors.
“SRF has decided to add a new product line to expand and complement its existing product offering,” the statement said adding that the company will now have a complete product portfolio in flexible packaging films.
The transaction will be closed by the end of October.
India’s packaging sector has recorded a few other deals in the last few months. Investcorp-backed Canpac Trends said in January that it acquired the packaging business of Mumbai-based Saptagiri Packagings while private equity firm PAG has stitched two big-ticket deals to acquire Manjushree Technopack and Pravesha Industries.
Singhi Advisors & Financial Services acted as the exclusive strategic and financial advisor to Kanpur Plastipack.
