JK Paper buys majority stake in Horizon Packs and Securipax Packaging; stock climbs ~3%

22 Nov 2022 , 09:15 AM

JK Paper entered into Share Purchase and Shareholders’ Agreements (SPSHAs) to acquire an 85% stake in Horizon Packs Private Ltd. (HPPL) and Securipax Packaging Private Ltd. (SPPL), and the remaining 15% stake over a three-year period.

With 7 plants across the country, HPPL and SPPL are India’s largest Corrugated Packaging manufacturers. HPPL and SPPL had a combined revenue of Rs832 crore in FY 2021-22. Corrugated packaging is a rapidly growing segment of the Indian paper and packaging industry, driven by growth in end-use industries such as food and beverage, FMCG, and so on.

Harsh Pati Singhania, Vice Chairman and Managing Director of JK Paper Ltd., said on the occasion, “It is a privilege to join hands with India’s largest player in the Corrugated Packaging segment. This, along with JK Paper’s upcoming corrugated facility in Ludhiana, will position the company as the dominant player in the corrugated packaging industry.”

The purchase consideration for the acquisition of an 85% stake has been fixed at Rs19.33 per share for HPPL and Rs1256.95 crore per share for SPPL, subject to adjustments as per terms of respective SPSHAs. The company will be acquiring 26.92 crore equity shares of HPPL and 4.63 lac equity shares of SPPL, representing 85% of Capital.

Therefore, the total consideration will be Rs520.36 crore for HPPL and Rs58.20 crore for SPPL.

At around 9.18 AM, JK Paper was trading at Rs433.70 up by 3.25% from its previous closing of Rs420.05 on the BSE. The scrip opened at Rs427.75.

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