Move to strengthen premium fabric business
Grasim Industries Ltd. has signed a definitive agreement to acquire 100 per cent equity shareholding of Soktas India Private Ltd. (SIPL) from its current promoters for an enterprise value of Rs. 165 crores, subject to net debt and working capital adjustments. The transaction will be funded by the company primarily out of internal accruals. SIPL will become a wholly-owned subsidiary of Grasim upon completion of the transaction.
SIPL is currently a wholly-owned subsidiary of Soktas Tekstil Sanayi Ve Ticaret A.S., the world renowned producer and marketer of fabrics, with its main facilities in Soke, Turkey. It is in the business of manufacturing and distribution of premium cotton fabrics. With state-of-the-art manufacturing facility located at Kolhapur, its plant capacity is about 10 million metres per annum of finished fabric.
SIPL sells premium fabrics in India under the ‘Soktas’, ‘Giza House’ and ‘Excellence by Soktas’ brands. The company is also a preferred supplier to leading Indian and global menswear brands. As of March 2018, SIPL reported revenue and EBITDA of Rs. 186 crores and Rs. 31 crores respectively.
Says Thomas Varghese, Business Head – Textiles, Aditya Birla Group: “The acquisition is in line with Grasim’s linen business strategy to strengthen its presence in the premium fabric market. Increasing disposable income, fashion and quality orientation of Indian consumers has resulted in an increase in the demand for premium fabric over the years. This acquisition is a compelling strategic fit, and further strengthens our leadership in the premium cotton and linen fabric market in India.”
Mr. Muharrem Kayhan, Chairman, Soktas Tekstil Sanayi Ve Ticaret A.S., says: “We have no doubt that SIPL will continue to grow under the leadership of Grasim. We look forward to the ongoing success of our brands in the sub-continent and beyond.”