Blackstone has engaged top investment bank Morgan Stanley as an advisor
Blackstone has enlisted the expertise of top investment bank Morgan Stanley as an advisor in its efforts to sell its majority stake in the listed portfolio firm and leading global specialty packaging company, EPL Ltd (formerly Essel Propack). This information was shared by three sources familiar with the matter who spoke to Moneycontrol on the condition of anonymity.
Moneycontrol was the first to report on October 30, 2024, that the US investment major was considering a strategic review of EPL Ltd.
Morgan Stanley has recently joined as the sell-side advisor for the potential sale. While the sale process has not officially begun, the goal is to identify a suitable buyer by March 2025. The intention is for a complete stake sale rather than a partial one, with Blackstone anticipating a significant premium in terms of valuation, according to one of the sources.
Blackstone, as the promoter, currently holds a 51.47 percent stake in EPL Ltd.
As of the close of trading on January 2, the company’s market capitalization was approximately Rs 8,361 crore. At this valuation, Blackstone’s controlling stake is estimated to be worth around Rs 4,303 crore. EPL’s share price has increased by approximately 32 percent over the past year.
Another source mentioned that Blackstone made its initial investment in 2019, making EPL Ltd a mature portfolio firm. There is already preliminary interest in the transaction from both strategic buyers and private equity firms.
In September 2020, Blackstone sold a 23 percent stake in Essel Propack through a block deal, generating around Rs 1,850 crore ($252 million).
While block deals have been a common method for private equity firms to exit listed portfolio companies, a third source familiar with the transaction stated that Blackstone is not considering this option and is instead focused on a complete exit through the M&A route. When contacted by Moneycontrol, Blackstone declined to comment. Emails sent to Morgan Stanley and EPL Ltd were left unanswered at the time of publishing this article.
In 2019, Morgan Stanley served as the financial advisor to the sellers and their affiliates during Blackstone’s acquisition of Essel Propack, now known as EPL Ltd.
Blackstone made a significant investment of up to $460 million in April 2019 to acquire a majority stake in EPL, surpassing competitors such as Albea and Indorama. This move solidified Blackstone’s position in the packaging industry.
In another notable transaction within the packaging sector, PAG recently finalized a deal to acquire a majority stake in Manjushree Technopack, backed by Advent International, for an enterprise value ranging from $850 million to $950 million.
EPL, headquartered in Mumbai, reported impressive revenue and net profit figures for FY23-24. The company operates 21 advanced manufacturing facilities across 10 countries, producing over 8 billion tubes annually. EPL is a key player in the oral care category and serves leading brands in various sectors.
Anand Kripalu, EPL’s MD and Global CEO, highlighted the company’s strong position in the market and its focus on driving growth in Beauty & Cosmetics and Pharma. With a strategic approach, EPL aims to achieve double-digit growth and a 20% EBITDA margin in the near future.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.