Ess Dee Aluminium to pump in Rs600 cr in acquisitions

Aluminiums packaging firm Ess Dee Aluminium has set aside about Rs500-600 crore most of which would be spent over next one year primarily in acquisitions.The company is striving for huge growth through the inorganic route earmarking Rs500-600 crore for acquisitions in the domestic and international markets.

The company is eyeing Kolkata-based India Foils currently under the Sterlite Group.
Confirming the development, Sudip Dutta,managing director Ess Dee Aluminium said the company was in the fray for India Foils currently under the Sterlite group.

India Foils has three units of which two are closed.Ess Dee had sought state government assistance like electricity subsidy and sales tax waiver for the turnaround.The company has also bid for Alcan’s packaging business which could be valued at $1 billion.

Read more in The Livemint article.

Ess Dee plans to buy Alcan arm

Ess Dee Aluminium, whose promoter Sudip Datta once depended on Alcan for the bulk of his income, has joined the race to acquire the packaging business of the Montreal-based giant which was recently taken over by Rio Tinto. The Mumbai-headquartered Ess Dee is the second domestic contender, the other being Essel Propack.

Bankers in the know of the development said there was a third contender as well — Australia’s Amcore. Rio Tinto, the new promoter of Alcan, has already begun talks with the three companies, they said, adding that the deal size is expected to be around $1 billion (Rs 4,000 crore), or 1.2 times the turnover of the target.

Rio Tinto, which recently acquired Alcan for $38 billion, decided to pull out of the packaging business as it does not fit into Alcan’s core area of operations and has been looking for a buyer for the past two months. Alcan makes packaging material for food and beverages, medical and pharmaceuticals as well as cosmetics and tobacco industries.

For Ess Dee, the successful acquisition of the packaging business of Alcan will give it presence in 13 countries —something which, otherwise, will take at least 10 years. Ess Dee posted net profit of Rs 37 crore and net sales of Rs 141 crore last year.It is learnt that DSP Merrill Lynch and Enam are advising Ess Dee on the acquisition.

Read more in The Business Standard article.

Ess Dee Aluminium Sells 5% To Morgan Stanley For Rs 81 Crore

It has been a remarkable journey for Ess Dee Aluminium, an aluminium foil-based packaging company for pharma businesses, from Rs 1 lakh turnover in 1991 to Rs 1,600 crore valuation in 2007. The company has just raised Rs 81 crore by diluting 5 per cent stake to Morgan Stanley. This was a company which analysts urged investors to avoid when it came up with an IPO in December last year.

Ess Dee Aluminium on Wednesday informed Bombay Stock Exchange that it would issue 1.41 million equity shares of Rs 10 face value on a preferential basis to Morgan Stanley at Rs 575 a share. That makes the deal worth Rs 81.07 crore or $18 million, valuing the company at $360 million. Interestingly, in March 2007, foreign fund Fidelity had picked up 5.21 per cent stake in the company for about Rs 40 crore, at just half of the current valuation.

It also has other biggies as investors - ICICI and Marc Faber who hold around 3.5 per cent and 4 per cent equity, respectively, besides Volrado Venture Partners (6.06 per cent) and Deutsche Securities Mauritius Ltd (2.11 per cent). Morgan Stanley's investment in Ess Dee comes at a time when it was also reportedly in talks to buy out the Vedanta Resources unit India Foils.

The story of Ess Dee, set up by Sudip Dutta (he apparently bought the sick unit from his employers), has its beginnings from a small scale unit in Jogeshwari in Mumbai with 12 employees in 1991. It started with manufacturing pouches and sachets and had its first year sales of just Rs 1 lakh. In 1994, they were appointed as one of the distributors for Indian Aluminium Company Ltd (INDAL). But the breakthrough came in 1994, when it acquired a sick aluminium foil printing unit in Goregaon on a rental basis, after which it entered the pharmaceutical packaging and printing market. It hasn't looked back ever since.