Manjushree Technopack to acquire Oricon Enterprises for INR 520 crore

Manjushree Technopack to acquire Oricon Enterprises for INR 520 crore
Photo - Manjushree Technopack

Manjushree Technopack (MTL), India's largest rigid plastics packaging manufacturer, has entered into definitive agreements to acquire the plastics packaging business of Oricon Enterprises (“OEL”) (“Oriental Containers”). Oriental Containers is one of India's largest manufacturers of plastic caps & closures, and preforms (an intermediate form of PET bottles used mainly in beverages).

This strategic acquisition by MTL will double our market share in the caps and closures segment and establish us as the undisputed market leader, with an impressive installed capacity of nearly 15 Bn pieces per annum. The addition of two manufacturing plants in Goa & Odisha will significantly boost our production capacity. This consolidation will enhance our product range and improve our unit economics through operational synergies and strengthen our key customer relationships. Furthermore, it will further solidify our position as the market leader in the preforms segment.

Along with gaining access to the preforms and closures market in eastern India, this transaction will help underscore MTL’s overall position as the market leader in India's rigid plastics packaging sector. The transaction is consistent with MTL’s growth strategy, adding to a track record of successfully creating value by acquiring and integrating businesses. MTL, owned by Advent International since 2018, has seen substantial growth in the last six years – expanding its presence from two business segments at the time of investment in 2018 to five business segments today.

The acquisition of Oricon Enterprises' plastics packaging business is subject to the completion of customary conditions, including Oricon Enterprises' corporate approvals.

Thimmaiah Napanda, managing director and chief executive officer of Manjushree Technopack, said, “We are excited to bring Oriental Containers under our ownership as we continue our journey of rapid growth and establishing market leadership in India's rigid plastic packaging space. While we are already the market leader in three of the five segments we operate in (preforms, containers, caps and closures, pumps and dispensers, and recycling), this transaction will make us the leader in four. This strategic move underscores our dedication to delivering unparalleled quality and value to our customers and supporting them as a fully integrated partner for growth and business continuity planning. I am thrilled at the prospect of successfully integrating the business and the significant growth opportunities this opens up for us as we expand further over the coming period.”

Adarsh Somani, managing director and promoter of Oricon Enterprises, said, “Oriental Containers was nurtured by my father, late Rajendra Somani, who pioneered manufacturing plastic closures for beverages industries through compression molding technology for the first time in India. Under my father's vision and a committed professional team, we have moved strength to strength and created a leadership position backed by our impeccable quality, innovation, services, and state-of-the-art infrastructure."

"Our business will complement MTL’s existing portfolio, helping MTL achieve market leadership in the closures space and gain a strong foothold in eastern India. Our customers, vendor partners, and employees will all benefit from MTL's consolidation and solid ecosystem as they continue their strong growth trajectory.”

EY acted as the exclusive M&A advisor to OEL. Phoenix Legal acted as legal counsel to OEL, and Khaitan & Co. advised MTL.

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