In a regulatory filing, MaxVIL, which is one of the three holding companies of the USD 4 billion Max Group, informed that the all-cash deal has been struck at an enterprise value of Rs 1,350 crore.
MaxVIL has a presence in packaging film and real estate businesses. The packaging arm Max Speciality Films is a 51:49 partnership with Toppan. It runs realty business through its 100 per cent subsidiary Max Estates.
MaxVIL said it has entered into a definitive agreement with Toppan Printing to divest its remaining 51 per cent stake in the specialty packaging films business for an “enterprise value of Rs 1,350 crore, translating into an equity value of about Rs 600-650 crore.”
Toppan will also take over the debt of Max Speciality Films as part of the deal.
In 2017, Toppan had acquired 49 per cent stake in Max Speciality Films for about Rs 200 crore and became a strategic partner of MaxVIL.
Max Speciality Films is one of the leading manufacturers of Biaxially Oriented Polypropylene (BOPP) films, including specialty packaging, labels, coating and thermal lamination films, with a total capacity of 72 kilo tonnes per annum.
With the divestment of the entire stake, MaxVIL will exit non-core businesses. It will now completely focus on the real estate business in the premium residential and commercial space in Delhi-NCR.
Sahil Vachani, MD and CEO of MaxVIL, said, “The decision to divest the residual 51 per cent stake in specialty packaging business to the existing partner is to generate additional growth capital to deploy in the real estate business that offers tremendous growth opportunities.”
After the divestment, MaxVIL said the company would be able to create a war chest of more than Rs 1,000 crore funded from sale proceeds, internal accruals, and potential commitment from financial investors.
This will help in expanding the residential and commercial real estate footprint in Delhi-NCR.
New York Life Insurance Company, a longstanding partner of the Group, is a strategic investor in the company, owning about 23 per cent stake.
The company will continue to look for such strategic/financial partners to back its expansion plans.
MaxVIL is in advance discussions with nearly half a dozen landowners to acquire and develop prime land parcels in Delhi-NCR.
Vachani said the company has developed few Grade-A commercial buildings in Delhi-NCR and is well-positioned to scale both its commercial and residential businesses.
Further, the company said the board has authorised its Investment and Finance Committee to explore various modalities for restructuring with Max Estates Ltd and be renamed as Max Estates Ltd after receiving required statutory approvals.
The change of name will resonate better with the business vision, strategy and focus of the company, MaxVIL said.
MaxVIL posted a total income of nearly Rs 1,190 crore in the last fiscal year.
Last month, Vachani had told PTI that the company would develop at least a million square feet each in both commercial and residential segment from 2025 onwards.
The company’s first office building ‘Max Towers’ in Noida, comprising around 6 lakh square feet, has been almost fully leased.
The second office building ‘Max House’, having 1 lakh square feet leasable area, at Okhla in the national capital would soon get fully leased.
The construction works for the second phase at Okhla project comprising around 1 lakh square feet as well as the new office complex ‘Max Square’, comprising 7 lakh square feet of leasable area, on Noida Expressway are progressing well.
The Max Square building at Noida is being developed through a joint venture with New York Life Insurance Company, which has a 49 per cent stake in the project.
MaxVIL has also bid for a stalled project of realty group The 3C Company in Noida and in proximity of its Max Towers project.
“The good news is CoC (Committee of Creditors) has approved our bid by 95.6 per cent. So, we have already won at the CoC level. We are awaiting approval from the NCLT (National Company Law Tribunal),” Vachani had said.
The stuck project has a total 30 lakh square feet area.
Apart from realty and pacakging business, MaxVIL has a real estate services and management company ‘Max Asset Services’ and an investment subsidiary, Max I, which supports real estate entrepreneurial ventures.