Indian omnichannel jewellery and lifestyle retailer Vaibhav Global (VGL) has agreed to acquire a majority stake in packaging company Encase Packaging Private.
The company has signed share subscription and shareholders’ agreements to acquire a 60% holding in Encase Packaging for a Rs40m ($536,400) consideration.
Based in Sri City in the Indian state of Andhra Pradesh, Encase Packaging specialises in manufacturing and trading various types of packaging material.
As VGL relies on packaging material imported from China for its jewellery products, the company believes that the addition of Encase Packaging will enhance its supply chain network by providing it with the required flexibility and cost advantage.
VGL chief financial officer Vineet Ganeriwala said: “We welcome Encase Packaging as a part of VGL Group.
“The acquisition will further consolidate our existing integrated supply chain and give substantial savings in the packaging cost of jewellery products.
“Besides this, it will also strengthen our efforts towards developing a sustainable packaging for our products.”
The deal has been financed through internal accruals and cash balances and is scheduled to close within around two months.
VGL sells fashion jewellery, accessories and lifestyle products to 125 million households through its TV home shopping networks, namely Shop LC in the US, Shop TJC in the UK and Shop LC in Germany.
Last year, the company was ranked 65th on Fortune India’s Next 500 list.
In November last year, India-based folding carton manufacturer Parksons Packaging acquired paperboard packaging producer Manohar Packaging in a deal thought to be worth between Rs2bn and Rs2.5bn.
Manohar Packaging produces paper board packaging for alcoholic beverages and confectionery, operating two ‘advanced’ manufacturing facilities that can convert more than 100 million sheets a year.
The acquisition increased Parksons’ total annual converting capacity to almost 150,000t and brought its total number of factories to eight.