Gokaldas Exports Limited (GEL) through its wholly owned subsidiaries has entered into an agreement to acquire Atraco Group (Atraco), a leading manufacturer of apparel with a strong market position and customer relationships across U.S. and Europe. Their product range includes shorts, pants, shirts, t-shirts, blouses and dresses catering across age groups.
Atraco was founded in 1986 and has a strong legacy of over three decades of regional leadership in the apparel business. Headquartered in Dubai, UAE, where it has its marketing, sourcing, product development and corporate functions, Atraco operates with a network of four manufacturing units in Kenya and one in Ethiopia producing about 40 million garments annually. The company’s key differentiators are:
- Relentless focus on cost and efficiency
- Emphasis on profitability and scale
- Strong sales and marketing expertise
- Access to low-cost duty-free manufacturing locations
- Long-standing relationships with customers
Atraco Group’s revenue is approximately US$ 107 million with a profit after tax of US$7.2 million for the calendar year 2022. It has more than 13,000+ workers spread over multiple locations in Kenya, Ethiopia and UAE.
The equity value of the transaction is US$ 55 million and the same will be funded by a mix of debt and internal accruals. The transaction will comprise of acquisition of shares and assets and will be subject to customary regulatory approvals. The transaction is expected to be closed by Q3 FY24 (Oct-Dec 23).
Sivaramakrishnan Ganapathi, Vice Chairman and Managing Director of Gokaldas Export Limited, said: “We are very excited to welcome Atraco’s admirable leadership team, their employees and their global customers to GEL. We have always believed in continuously adding production capacity at strategic locations enhancing our value proposition to customers. The acquisition of Atraco is an important step in this direction as it is strategically relevant, possesses a good complementary customer base, operationally strong, and above all, a leader in its own sphere. With this acquisition, we will gain access to low-cost duty-free locations for manufacturing. Together, we can deliver a wider choice and value proposition to our global customers. We look forward to welcoming over 13,000 new members into the GEL family.”
Gokaldas Exports was supported by JM Financial Limited as transaction advisor, Khaitan & Co. as legal advisor and BDO UAE, BDO East Africa-Kenya as partner for due diligence.
