Essel Propack acquires CavinKare's packaging unit for Rs 63.5 cr

Mumbai, Aug 30 (UNI) Essel Propack Ltd has acquired 100 per cent equity stake in the Pondicherry-based specialty packaging materials, Packaging India Pvt Ltd (PIPL) - a part of the FMCG major CavinKare Group, Chennai - in an all cash-deal for Rs 63.5 crore.

Briefing newspersons here today on the acquisition, Mr Ashok Goel, Chairman&Managing Director of Essel Propack said, ''With the Pharma and Retail market poised for tremendous growth, the demand for specialty packaging materials is slated to rise high. As such this is an opportune time for us to step in and leverage opportunities through this (PIPL) kind of acquisition.'' Replying to a question, Mr Goel said the funding of acquisition will be through internal accruals. To a related query, he said PIPL will be merged with the Essel Propack after obtaining necessary clearances including the High Court's permission in about six months time.

Commenting on the parameter of the acquisition, Mr Goel said ''the acquisition price was 5.67 multiples of EBIDTA (earnings before interest depreciation taxes and allowances) of PIPL for FY'07.'' PIPL's revenue for FY'07 was projected at Rs 115 crore, while revenue for FY'06 stood at Rs 98.9 crore.

The present team at the company headed by T D Mohan, the Managing Director, will continue to manage the operations of the company, under the guidance of the company.

On the core synergies between PIPL and Essel Propack, Mr Goel pointed out that PIPL has High-end lamination technology for specialty materials, Knowledge of requirement of Barrier Properties, and OEM (original equipment manufacturers) business model were some of them.

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