The acquisition will help Essel unlock synergies such as enhanced cross selling opportunity in the German markets, sourcing flexibility and better capacity utilization at all of its Europe plants.
Essel now can deploy its proven capability to offer high decoration laminated tube solutions for the premium non oral care brands across Europe, including Germany. Essel 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 US $40 Mn will now be consolidated in Essel's global revenue and will boost consolidated revenue by 11%. In FY16, Essel Propack's consolidated revenue stood at Rs.2,184 crore.
Speaking on the acquisition, Mr. Ashok Goel, Vice-Chairman & 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% and PAT growth of 20% and achieving our Mission 20:20:20."
The company has embarked on a mission 20:20:20 - EBITDA margin of 20%, Return on Equity (ROE) at 20% and Return on Capital Employed (ROCE) at 20% within next 2 yrs.
Ram Ramasamy, Global COO, Essel Propack, said, "The complete buyout will enable us to step up productivity and efficiencies to those of other Essel Propack plants and improve overall profits."
Alan Conner, European Business Vice-President of Essel Propack, said, "This move will help us to creating a strong platform for growth in Europe especially in the non-oral care category. As we have a ready customer base, this will help improve our revenue growth through synergies. The acquisition will add 63% to our Europe revenue on an annualized basis."