S. P. Apparels Ltd. (SPAL), a leading apparel manufacturer and exporter, has signed a definitive agreement to acquire 100 percent stake of Young Brand Apparel Private Limited (YBAPL) the subsidiary of Bannari Amman Spinning Mills Limited along with the garment unit situated at Palladam of Bannari Amman Spinning Mills Limited and land and building situated at SIPCOT (The State Industries Promotion Corporation of Tamil Nadu Limited) for a value of Rs. 223 crore.
Under a strategic acquisition initiative, SPAL plans to acquire a 51.33% stake from Bannari Amman of Young Brand Apparel Private Limited and undertake to acquire 49% stake in YBAPL from joint venture partners. To fund this acquisition, SPAL will leverage a balanced combination of internal accruals and borrowed capital.
With this acquisition, SPAL will be able to diversify its product offerings by leveraging each other’s strengths and further expand its customer base and target markets. The land parcel is expected to boost SPAL’s manufacturing capacity to fuel future expansion.
Incorporated in December 2006, YBAPL is a manufacturing and export company based out of Tamil Nadu. The company manufactures Intimate Wear for brands like American Eagle, Jockey International, Marks & Spencer and Benetton. The company exports to countries like the US, UK, Japan, and Canada.
Commenting on the acquisition, Mr. P. Sundararajan, Chairman and Managing Director, S. P. Apparels Limited, said: “YBAPL is a prominent name in the Intimate Wear manufacturing segment with a robust presence in key global markets and strong manufacturing capacity. The company is scaling up its business in markets like the US, UK, etc. It’s a strategically important acquisition which is in line with our vision to diversify into other textile and apparel categories, further strengthen our export basket, market presence, and build a more broad-based business model. YBAPL will improve the cross-sell synergy in terms of customer base and product offerings, as we are working towards further penetrating the US market. The acquisition will not only strengthen our export spread but also lay a strong foundation for sustainable and resilient business growth for us.”
YBAPL reported a revenue of Rs. 329 crore for the financial year ended on March 31, 2023.
