INDIA – Leading paper company, JK Paper, has entered into an agreement to acquire Manipal Utility Packaging Solutions Private (MUPSPL) for approximately Rs 90 crore (US$10.81 million).
As part of the share purchase agreement (SPA), JK will purchase 47 million equity shares, which represents 100% of the shares of MUPSPL, at a price of Rs21.80 (US$0.26) per equity share with a face value of Rs10 each.
MUPSPL specializes in manufacturing packaging products such as folding cartons, corrugated boxes, and labels. The company generated a revenue of Rs1.47 billion (US$ 17.66m) in the financial year 2022-23.
Headquartered in Manipal, a town in the Indian state of Karnataka, the company operates a network of four manufacturing plants throughout the country.
It is part of JK’s long-term strategic objective and that of its subsidiaries in the packaging industry.
The acquisition is expected to be completed within six weeks of executing the SPA with the target entity and its promoters/shareholders, subject to fulfilling the conditions mentioned in the SPA, the company said.
Harsh Pati Singhania, the Vice-Chair and Managing Director of JK, stated, “This acquisition aligns with our company’s long-term strategic objective in the packaging industry. It provides us with the opportunity to offer comprehensive solutions to our customers in terms of secondary and tertiary packaging.
“Additionally, it will enhance operational efficiencies and ensure the growth and value addition of MUPSPL for all stakeholders.”
JK produces coated paper and packaging products in India. MUPSPL’s expertise in manufacturing is said to benefit its customers, employees, vendors, and partners.
JK expects to benefit from this deal because the packaging business is one of the fastest-growing segments in the Indian paper and packaging industry. The growth is fueled by the rise in end-use industries such as food and beverage, and FMCG.
According to Mordor Intelligence, the packaging market size, estimated at US$71.90 billion in 2023, is expected to reach US$130.14 billion by 2028, registering a compound annual growth rate (CAGR) of 12.60% during the forecast period.
The packaging industry is driven by factors such as a growing population, rising income levels, and changing lifestyles. These factors are expected to drive consumption across various industries, resulting in increased demand for packaging product solutions, as stated in the report.
Moreover, the demand for packaged products from the rural sector is being fueled by the increasing media penetration through the Internet and television.
