Blackstone-backed EPL unlocks new growth avenue with Indovida merger

EPL Ltd’s recently announced merger with Indovida is not just another expansion, but a shift in the business model. The transaction is structured as a share-swap, making it largely cash-neutral, where EPL will issue shares to Indovida shareholders.The deal values EPL at about ₹339 per share, implying a 70% premium to its pre-announcement closing price on 27 March, while Indovida is being acquired at a discount to EPL’s valuation multiple.

Thus, the transaction is expected to be EPS-accretive from the first year itself.EPL is the world’s largest laminated tube manufacturer, supplying one out of every three toothpaste tubes globally, along with packaging for cosmetics, pharma and food products. Until now, EPL was largely a single-format packaging player (tubes).But growth has been underwhelming.

The core tubes business is mature and largely saturated, especially in developed markets. Thus, EPL’s revenue growth has been modest, clocking only 7% CAGR over FY23-25.On the other hand, Indovida operates in rigid packaging (preforms, bottles, closures) with 75% of its revenue from PET preforms alone.Preforms are an intermediate in the production chain that can be shaped into products like containers and bottles.

Closures include lids, caps, plugs and seals.Both businesses are complementary, with little overlap. EPL brings strong relationships in oral care and cosmetics, while Indovida adds exposure to food and beverages, healthcare and new packaging formats.

This opens up entirely new categories such as beverages for EPL.The merger significantly expands EPL’s geographical reach. Indovida has a strong presence in Southeast Asia and Africa, and the combined entity will now generate 75% of its revenue from emerging markets, which