Grasim Industries Ltd on Wednesday said it has signed a definitive agreement to acquire 100% equity shareholding of Soktas India Pvt. Ltd (SIPL) from its current promoters for an enterprise value of ?165 crore.
The transaction will be funded by the company from its internal accruals, Grasim said in a statement. SIPL will become a wholly owned subsidiary of Grasim after the completion of the transaction, it added.
SIPL is currently a wholly owned unit of SÖKTA? Tekstil Sanayi ve Ticaret A.S., a global producer and marketer of fabrics, with its main facilities in Soke, Turkey.
Soktas is in the business of manufacturing and the distribution of premium cotton fabrics.
Its manufacturing facility is located in Kolhapur, Maharashtra. The plant has a capacity of about 10 million metres per year of finished fabric.
It sells premium fabrics in India under the “SÖKTA?”, “Giza House” and “Excellence by SÖKTA?” brands. The company is also a preferred supplier to leading Indian and global menswear brands.
In 2017-2018, it had reported revenue and Ebitda (earnings before interest, tax, depreciation and amortizations) of ?186 crore and ?31 crore, respectively.
“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 have 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,” said Thomas Varghese, business head (textiles), Aditya Birla Group.
Grasim already has a significant presence in India’s premium linen fabric market, through its brand Linen Club.
“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 subcontinent and beyond,” said Muharrem Kayhan, chairman, SÖKTA? Tekstil Sanayi ve Ticaret A.S.