JK Paper Ltd, a unit of the Singhania family-led JK Group, has agreed to acquire a controlling stake in folding carton manufacturer Borkar Packaging Pvt Ltd, marking its fifth acquisition in the sector in three years.
The paper manufacturer said it will acquire a 72% stake in Goa-headquartered Borkar Packaging for about Rs 235 crore ($27 million) in cash consideration, according to a stock exchange filing. Of this, JK Paper will acquire 65.7% from existing shareholders and the remainder via subscription to fresh equity shares in Borkar.
The company expects to acquire the remaining 28% stake in the company over the next four years, subject to fulfillment of conditions mentioned in the share purchase agreement.
VCCircle has separately gathered that Borkar’s enterprise value, which includes debt, was around Rs 450 crore in this transaction.
Borkar had held talks with few rivals last year to raise Rs 400-500 crore in capital. In March, VCCircle reported that several companies had expressed interest in acquiring a controlling stake in Borkar Packaging for a deal likely valued at around Rs 550 crore.
Japanese firm Oji Holdings and Investcorp-backed Indian firm Canpac Trends were the leading
contenders for the acquisition, VCCircle reported at the time, with fast moving consumer goods giant ITC Ltd also having shown interest in the takeover.
The deal is part of JK Paper’s inorganic growth strategy to strengthen its capabilities in the folding cartons space and bolster its position in the broader paper packaging landscape, it said in a statement.
“The acquisition of BPPL is in line with the long-term strategic objective of the company and gives us an opportunity to offer combined solutions to customers with respect to secondary and tertiary packaging,” said Harsh Pati Singhania, chairman and managing director at JK Paper.
Singhi Advisors acted as the sole financial advisor to Borkar Packaging Pvt Ltd and the family for this transaction.
Founded in 1945, Borkar primarily offers paperboard, fluted cartons and corrugated shippers. The company operates factories in eight locations across Goa, Pune, Daman, Himachal Pradesh, Kolkata and Puducherry. The firm caters to the packaging requirements of more than 500 companies, including Unilever, Colgate, Nestle, Dabur, Alkem Laboratories, Indoco Remedies, among others.
JK Paper said Borkar is its fifth acquisition in the space. Previously, the company acquired Horizon Pack, Securipax Packaging, Manipal Utility, and Radheshyam Wellpack-all in the corrugated packaging category.
While Borkar’s latest financials are not available, it reported Rs 393.2 crore revenue in FY24, almost 3% lower than Rs 404.61 crore in FY23, according to stock exchange filings.
Source: vccircle
