NEW DELHI: Global private equity Bain Capital has joined the race to acquire a controlling stake in Ajay Piramal-promoted Piramal Glass Private Limited (PGPL), two people directly aware of the development told Mint, requesting anonymity as the discussions are private.
According to the people cited above, Bain Capital's offer which came over the weekend is higher than rival Blackstone’s group binding bid which has offered close to $790 million for the company.
"Bain capital is a late entrant but has made a higher offer which is close to $900 million for the company," said one of the people cited above. "Piramal group is seeking a valuation of around $1 billion in enterprise value."
"Blackstone’s offer is valid till November 4 and Bain is expected to make a binding offer by then," said the other person cited above. "In addition to Blackstone and Bian, there are two more bidders in the race."
PGPL is a leading player in the global glass packaging industry and has seven subsidiaries, of which two--Piramal Glass Ceylon PLC and Piramal Glass USA Inc--have manufacturing units in Sri Lanka and the US, respectively. PGPL has five manufacturing units, two each in India and the US, and one in Sri Lanka, with a total production capacity of 1,410 tonnes per day as on March 31, 2019.
The transaction, when its goes through, will mark another stake divestment by Piramal group which is looking to shore up the capital base of its real estate, pharma and financial services businesses through stake sales in non-core businesses.
In October 2019, the group’s flagship entity Piramal Enterprises had raised ₹5,400 crore through a mix of rights issue of ₹3,650 crore and preferential allotment of convertible instruments to Canadian pension fund manager Caisse de dépôt et placement du Québec (CDPQ), amounting to ₹1,750 crore.
In October this year, Piramal Pharma Ltd, a subsidiary Piramal Enterprises Ltd (PEL), completed the sale of a 20% stake to US-based private equity giant Carlyle Group for ₹3,523.40 crore. Piramal group has said the proceeds from the sale will be used as growth capital for the group’s pharma businesses to expand existing capacities as well as to tap attractive acquisition opportunities within and outside India.
While requests for comment to Piramal group and Blackstone remained unanswered until press time, a spokesperson for Bain Capital declined to comment.
According to the company’s corporate filings, Piramal Glass Private had made unrelated investments of around ₹300 crore in FY2019 and YTD FY2020 in Chennai-based Archean Group. In 2018, India Resurgent Fund (IRF), a joint venture between Bain Capital Credit and Piramal Enterprises, invested about ₹800 crore in Archean Chemical Industries Ltd in a structured credit transaction comprising both debt and equity following which it owned close to 30% stake in the company.
The onset of the pandemic has led to a ris in demand for the global packaging industry across segments. Makers of vials and syringes have for instance started scaling up capacity in anticipation of a surge in demand if and when a successful covid-19 vaccine is launched in India—a market that could hit $6 billion. (Source: https://www.livemint.com/companies/news/bain-capital-joins-race-to-acquire-piramal-glass-11604312632773.html)