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Essel Propack to acquire 100 per cent stake in EDG

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Following this deal Essel Propack’s consolidated revenue will propel by 11 per cent

Essel Propack, a global leader in laminated plastic tubes catering to the FMCG and Pharma space, announced a complete buyout of Essel Deutschland Germany (EDG). Following this transaction, EDG will be a 100 per cent subsidiary of Essel Propack. Until now, Essel has been a JV partner with 24.9 per cent share in EDG. The enterprise value of EDG stands at $ 32 million.

The acquisition will help Essel unlock synergies such as enhanced cross selling opportunity in the German markets, sourcing flexibility and better capacity utilisation at all of its Europe plants. Essel can now deploy its proven capability to offer high decoration laminated tube solutions for the premium non-oral care brands across Europe, including Germany. It will also have the benefit of a long term supply agreement which EDG has recently signed with a local oral care company.

The EDG revenue of approximately $40 mn will now be consolidated in Essel’s global revenue and will boost consolidated revenue by 11 per cent. In FY16, Essel Propack’s consolidated revenue stood at Rs 2,184 crore

The company has embarked on a mission 20:20:20 – EBITDA margin of 20 per cent, Return on Equity (ROE) at 20 per cent and Return on Capital Employed (ROCE) at 20 per cent within next 2 yrs. Speaking on the acquisition, Ashok Goel, Vice-Chairman and the Managing Director of Essel Propack said, “The acquisition of EDG will further enhance our position in the non-oral care category. This move is in keeping with our overall plans for achieving revenue growth of 15 per cent and PAT growth of 20 per cent and achieving our Mission 20:20:20.”

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