Essel Propack scales record high after announcing acquisition of Germany firm

Essel Propack rose 4.56% to Rs 232.85 at 11:45 IST on BSE after the company announced a complete buyout of Essel Deutschland Germany.

The announcement was made before market hours today, 21 September 2016.

Meanwhile, the S&P BSE Sensex was up 148.62 points or 0.52% at 28,671.82

On BSE, so far 61,000 shares were traded in the counter as against average daily volume of 9,268 shares in the past one quarter. The stock hit a high of Rs 245.20 in intraday trade so far, which is record high for the counter. The stock hit a low of Rs 232.50 so far during the day. The stock had hit a 52-week low of Rs 132.50 on 20 January 2016. The stock had outperformed the market over the past 30 days till 20 September 2016, rising 2.77% compared with 1.92% rise in the Sensex. The scrip also outperformed the market in past one quarter, gaining 15.12% as against Sensex's 6.57% rise.

The mid-cap company has equity capital of Rs 31.42 crore. Face value per share is Rs 2.

Essel Propack today, 21 September 2016 announced a complete buyout of Essel Deutschland Germany (EDG). Following this transaction, EDG will be a 100% subsidiary of Essel Propack. Until now, Essel Propack has been a joint venture (JV) partner with 24.9% share in EDG. The enterprise value of EDG stands at $32 million.

The acquisition will help the company 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 Propack said. The company now can deploy its proven capability to offer high decoration laminated tube solutions for the premium non oral care brands across Europe, including Germany, it said. Essel Propack will also have the benefit of a long term supply agreement which EDG has recently signed with a local oral care company, it added.

The EDG revenue of approximately $40 million will now be consolidated in Essel's global revenue and will boost consolidated revenue by 11%. In the year ended 31 March 2016 (FY 2016), Essel Propack's consolidated revenue stood at Rs 2184 crore.

Ram Ramasamy, Global COO, Essel Propack, said that the complete buyout will enable the company to step up productivity and efficiency to those of other Essel Propack plants and improve overall profits.

Essel Propack's consolidated net profit rose 6.03% to Rs 37.62 crore on 6.31% fall in net sales to Rs 517.64 crore in Q1 June 2016 over Q1 June 2015.

Essel Propack is the largest specialty packaging global company, manufacturing laminated plastic tubes catering to the FMCG and Pharma space.

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