Apparel exporter Gokaldas Exports Ltd, previously backed by private equity giant Blackstone, has entered into an agreement to acquire the apparel business of Matrix Clothing Pvt Ltd for an enterprise value of Rs 489 crores ($59 million).
Gokaldas Exports will get 100% stake in Matrix Design & Industries Pvt Ltd under the agreement that also includes a share-swap deal. Of the total enterprise value, Rs 247.5 crores will be paid by way of preferential allotment of shares of Gokaldas Exports.
The deal provides Gokaldas Exports an entry into the knit apparel business segment, a distinct global customer base, enhanced access to European and the UK markets and a potential for low-cost capacity expansion, it said.
Matrix Clothing group is a manufacturer of knitwear apparel for various brands with major geographical exposure to Europe, the UK, and North America. The group operates out of Gurugram, Haryana, and has five manufacturing facilities.
“We have always believed in continuously adding production capacity at strategic locations enhancing our value proposition to our valued customers,” said Gokaldas Exports Vice Chairman and Managing Director Sivaramakrishnan Ganapathi. “The acquisition of Matrix is an important step in this direction as it is strategically relevant, possesses a good complementary customer base, operationally strong.”
JM Financial Ltd served as the transaction advisor for Gokaldas Exports, Anagram Partners provided legal advisory services, and the BDO India team did due diligence.
Last year, Gokaldas Exports acquired Dubai-based apparel manufacturer Atraco Group for $55 million.
Gokaldas Exports also released its financial report for the third quarter ended December, reporting a profit after tax (PAT) of Rs 30.4 crore, a decline of 25% on year but a growth of 28% sequentially. Revenues grew 6% on year and 10% sequentially to Rs 559.80 crore. The EBITDA margin improved by 163 bps sequentially to 12.6%.
“Our performance reflects a good recovery, both on a YoY and sequential basis, as we have overcome most of the business headwinds prevalent in the previous quarters,” said Sivaramakrishnan Ganapathi, vice chairman and managing director of Gokaldas Exports. “We intend to build on the revival and continue the growth momentum. We will stay focused on improving operating parameters and remain confident in the medium to long-term prospects of the company.”
Gokaldas Exports’ board also approved raising up to Rs 600 crores through a issuance of securities via preferential allotment, private placement, or a qualified institutions placement.
Established in 1979, Gokaldas Exports is one of India's largest apparel exporters, boasting of an annual turnover of $200 million and a workforce of 25,000 across 23 manufacturing units.
