Indorama Ventures Public Company Limited (SET: IVL) has announced that the company has entered into an agreement with Epsilon BidCo PTE. Limited (a Blackstone Group entity) on 24 February, 2025 to purchase a 24.9% equity stake in EPL Limited (EPL), a public company listed on the BSE Limited and National Stock Exchange of India Limited.
EPL is a leading global manufacturer of PE packaging solutions with significant potential for growth in emerging markets, with its operations spanning 11 countries and a strong foothold in high-growth markets such as India, Mexico, Colombia, Brazil, and the Philippines.
The total value of consideration for the purchase of 24.9% equity stake in EPL Limited is approximately INR 19,079 Mn (equivalent to approximately THB 7,440 million). The amount will be paid in cash, and the transaction will be financed through internal cash flow.
According to data by Bloomberg, the majority of revenue for EPL comes from Asia, with EBITDA and net profit staying within the range of $72-86 million and $28-34 million, respectively, from 2022 to 2024.
Krungsri Securities (KSS) expressed a ‘slightly positive’ stance for the development and pointed out several key factors: 1) the acquisition valued EV/EBITDA in 2024 at approximately 10 times, which is not significantly higher than IVL’s current range of 8-9 times and similar acquisitions; 2) the acquisition is expected to yield IVL a profit share of about THB 280 million in 2025, translating to an upside-to-profit ratio of around 2.5%; and 3) the move is seen as a strategic step for IVL to enter the packaging market in India, offering substantial growth opportunities and potential for future investment.
Additionally, the analyst raised no concerns regarding IVL’s cash flows, citing a recorded amount of around THB 21 billion in the third quarter of 2024, and gave the company a ‘Buy’ recommendation, with a target price of THB 24 per share.
