Mumbai: Buyout store Apollo Global Management and Renuka Ramnath’s Multiples Alternate Asset Management have entered the race to acquire Piramal Group’s glass business that’s considered Asia’s biggest for specialty makes, variou people aware of the talks told ET.The two affiliate Blackstone, the world’s largest PE firm, and Collaborator Group Holding AG for the buyout, which could be in the range of Rs 7,000 crore to Rs 8,000 crore ($ 1 billion ), the people mentioned above lend. Bloomberg was the first to report about Blackstone and Partner Group constituting the shortlist last week.All four have been qualified after the first round of screening and have begun due diligence before they submit a binding offer next month.Billionaire Ajay Piramal’s decision to exit non-core business like glass to deleverage Piramal Group’s balance sheet comes close on the heels of flagship Piramal Enterprises’ move to unlock value in the pharma business by selling a 20 per cent stake to Carlyle for Rs 3,705 crore ($ 490 million ). The ongoing global pandemic has also given a perfect window to cash out, leveraging the record pharma sales worldwide.ET was the first to report the proposed sale strategies on July 30. Both Apollo and Blackstone have been involved in blockbuster deals in the glass business in Europe in the past. Apollo had acquired Verallia, the manufacturer responsible for Dom Perignon bottles and Nutella cups, from Compagnie de Saint Gobain of France in 2015 for really under 3 billion. The firm, the third largest glass maker in all countries of the world, saw its initial share sale in 2019.78246326 Similarly, Blackstone constituted one of its best returns from Gerresheimer, the German pharmaceutical box consultant, selling its stake first through a public inventory and then exiting its residual 25 per cent of cases stake at a 7.5 periods gain within four years of acquiring the manufacturer of glass bottles and plastic products from Investcorp and JP Morgan in 2004 for $955.2 million, inclusive of debt.The onetime CEO of Gerresheimer is believed to be advising Blackstone for the Piramal sale, said one of the sources mentioned above. In India, Blackstone also is the assure shareholder in Essel Propack.“Multiples PE might be backed by one of its largest LPs, CPPIB in this deal. They have a co-investment agreement for the recent fund that it invoked, ” said person or persons with direct knowledge of the development.The fund envisage the first close of its third fund at $560 million in December 2019. The fund that targets around $750 -8 00 million toward its final close tallies India’s sovereign fund NIIF and IFC as large-scale investors apart from CPPIB.Apollo Global, Blackstone Capital and Partners Group declined to comment. Emailed queries sent to Multiples did not elicit any response till press time. Piramal Group declined to comment for the story.Investment banks Bank of America and Axis Capital have been tasked to find a buyer for the business. Several PE stores including Bain, KKR, Advent had estimated the prospect, but only four have been shortlisted.Piramal Glass gratifies to three key industries — pharmaceutical, cosmetics and perfumery, menu and beverage — designing and creating bottles and vials. About 77 per cent of cases of its auctions come from high-end cosmetics and specialty spirits.It has seven subsidiaries, of which two — Piramal Glass Ceylon PLC and Piramal Glass USA Inc — are operating subsidiaries and own manufacturing spots in Sri Lanka and the US, respectively.The company has five manufacturing points — two each in India and the US, and one in Sri Lanka — with a total production capacity of 1,435 tonnes per day( TPD ), with 12 furnaces and 63 production lines.The company said its current global marketings have touched Rs 2,500 crore ($ 357 million ). It is expected to have clocked Rs 750 crore ($ 90 – $100 million) in operating profit before tax( Ebitda) in FY20 backed by rising sales in the pharma segment, its smallest with 23 per cent of total revenue.Earlier in the year, the company announced a Rs 300 -crore ($ 42 million) investing in a greenfield seed in Gujarat- an expansion plan that included one brand-new furnace with seven brand-new manufacturing strings across approximately 300,000 square paws plant, gratifying primarily to high-end specialty spirit, meat& beverage and pharmaceutical markets chiefly for exportations to countries in Asia, Europe and the US.In a recent interview, the management had said that the company is assure a 30 per cent jump in sales of Type 1 borosilicate glass vials, specialty vials used to bottle prescriptions, in the June quarter, on account of a necessitate flood for medicines to combat the Covid-1 9 pandemic.
Read more: economictimes.indiatimes.com
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