Canadian investment firm Brookfield Asset Management Inc. on Thursday said it has acquired a Rs 2,000 crore (approximately $263 million) minority stake in the packaging film business from Jindal Poly Films Ltd. (JPFL). An agreement has been reached to buy the stake.
This is one of the largest private equity deals in India’s packaging industry. Foreign investors including Blackstone, Warburg Pincus and Advent International have shown interest in the industry over the years. Apart from this, domestic investors like JM Financial PE and Premji Invest have also been attracted.
Brookfield’s Special Investments program BSI will buy a 25% stake in a new unit with institutional partners, Brookfield said in a statement. This unit was created by Jindal Poly Films for its packaging film business. It gets about 85% of its revenue from this business.
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Jindal Poly, listed in Mumbai, will retain 75% ownership of the new unit. It will be called JPFL Films Pvt Ltd. It will also continue to own its non-woven business unit and other corporate assets.
Dev Santani, Managing Director, BSI said, “BSI is sector agnostic and invests largely in non-control (minority) companies with a view to investing. Here we can infuse capital and invest in leading companies. We look forward to continuing our BSI investments in India and be the preferred partner.”
Brookfield’s structured equity investment in JPFL consists of compulsory convertible preference shares (CCPS) and equity shares of the new subsidiary. These provide a downside protection to BSI’s investment. Investor rights agreement is signed.
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The transaction is expected to be completed during the first half of FY 2023 and is subject to customary approvals.
The packaging films business had generated revenue of Rs 3,473 crore in a year till March 2021.
Brookfield has been operating in India for over 11 years and currently manages $20.6 billion in assets across infrastructure, real estate and renewable energy.
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