Alternative Asset Manager PAG Acquires Second Indian Packaging Firm

PAG, one of Asia’s biggest alternative asset managers, has agreed to buy a second packaging company in India, seeking to take advantage of the country’s growing pharmaceutical exports.

The buyout firm said it has bought a majority stake in Pravesha Industries Pvt, one of the largest pharma-focused packaging firms in India. It follows the acquisition for nearly $1 billion of Manjushree Technopack Ltd., India’s biggest rigid plastic packaging provider known for making plastic bottles. PAG has deployed about $1.5 billion in India since its first investment in late 2020.

Like most of its peers, PAG’s private equity team is looking to benefit from the country’s expanding middle class by focusing on industries and products tied to high-demand sectors. Its most recent deals strengthen its packaging portfolio in India, allowing the firm to tap into rising consumption trends while avoiding paying premium prices of overvalued brands amid surging valuations, said Lincoln Pan, co-head of private equity, in an interview. 

“The consumption theme has been tough to play, as valuations for anything consumer or brand-related in India are far above what we’ve been willing to pay,” Pan said. “Rather than playing single brand risk, we are building a clear market-leading platform that has diversified exposure to pharmaceuticals and household consumption such as packaging, which is all a proxy for growth of the middle class.”

PAG’s private equity team is focusing on pharmaceuticals, financial services, and consumer sectors and now manages around $3 billion across asset classes in India. 

The country has become a hot-spot for private equity firms seeking to reduce their reliance on China and boost deal flows across Asia. The firm has spent almost a decade building local teams across Asia including deepening its presence in India, and has less than 30% of its business in China.