Ballarpur Industries (BILT) has bid close to $200 million for Malaysia’s largest integrated paper manufacturer GS Paper & Packaging Group (GSPP). It will submit a final bid for the Malaysian company next week when three other bidders will also submit their bids, according to sources. GSPP is the largest player in the container board segment of the paper market in Malaysia. It has two paper mills with a capacity to produce 270,000 tonne of paper per annum and two plants that make container boxes with a capacity of 150,000 tonne per annum.
This deal will help BILT achieve forward integration in the Malaysian market, where it has acquired Sabah Forest Industries in 2007 in a $261-million deal along with JP Morgan. The acquisition will give the company access to raw material supplies in the form of wood pulp. GSPP is said to have a large network of corporate and institutional clients in Malaysia and a strong distribution set-up through which BILT intends to push its products.
GSPP is owned by CVC Capital Partners, which is among the top-five private equity firms globally, with approximately $46 billion in funds. CVC had acquired GSPP in March 2007 from diversified Malaysian conglomerate Gentang Group in a deal valued at RM 745 million, over $220 million, as per current exchange rates.
India’s largest paper manufacturer has already tied up funds for its bid and could raise up to $150 million in long-term debt to fund the deal, while the remaining money is expected to be infused in the form of equity by the company.