Brookfield, Platinum slug it out to acquire PGP Glass; PE firms seek controlling stake now at $1.4-1.6 bn value

The deal contours are also said to have changed as negotiations progressed, said the people cited above.

ET Bureau

On sale initially was a minimum 50% stake along with joint control as Blackstone looked to unlock value in its three-year-old investment. However, the PE suitors are now seeking a stake of 65-75% with Blackstone owning the rest. Depending on the final valuation, Blackstone may agree, but the exact quantum of stake on offer is still being negotiated.

“It’s easier for one rather than two to drive a company and create value in the process. Blackstone will get to enjoy the upside too. They are already in the money,” said one of the persons cited.

The valuation hasn’t been nailed down yet. Blackstone is seeking a control premium of $1.8-2 billion, which the bidders are unlikely to agree to.

FY24 NUMBERS Blackstone bought 100% of the company from billionaire businessman Ajay Piramal in 2021 for $1 billion, trumping Partners Group. The company has grown since the 2021 transaction. Revenue has doubled and margins have improved. FY24 revenue was Rs 4,000 crore and ebitda was Rs 1,162 crore ($140 million). The suitors are looking at a valuation of 10-12 times the FY24 ebitda, which translates to $1.4-1.68 billion.

The expectations around high valuation had dampened the interest of CPPIB, Partners Group, Carlyle, Apax and Bain Capital, among others, who had been tapped by Jefferies, banker to the transaction. Early on in the process, those that had expressed interest included of Singapore, PAG, Alpha Wave and Apollo Global Management.

ET had on February 25 reported that at least five PE funds were circling the company.

Blackstone and Brookfield declined to comment. Platinum didn’t respond to queries.

Moneycontrol had earlier reported that Blackstone may be open to selling a controlling stake in the company.

PGP primarily caters to the cosmetics and perfumery (CP), pharmaceuticals, and specialty food packaging (SFB) segments, extending to beverages and alcohol bottles. The company is a leading supplier of glass bottles to top cosmetic brands globally and derives over 45% of its revenue from the CP industry. The company is also a market leader in Type I pharma glass with over 50% market share in the domestic market. Only four companies make this type of glass globally.

The company has three manufacturing facilities in India and Sri Lanka and marketing and distribution arms in the US, UK, Dubai and Europe, exporting to over 60 countries. PGP has long-term relationships with consistent repeat orders from existing clients. However, there are no long-term supply contracts in place. The top 10 customers contributed about 14% of revenue in FY22. Its key clients include CIMSA, Baralan Glass, Coty, Unilever, LVMH, Estee Lauder and Baralan International SPA.