Gokaldas Exports, a leading apparel manufacturer based in Bengaluru, has recently inked a deal with Gurugram’s Matrix Clothing. The agreement entails Gokaldas Exports acquiring 100% equity in Matrix Design & Industries for a total sum of INR 489 crore. To facilitate this transaction, Gokaldas will engage in a share swap, with shares valued at INR 247.5 crore, along with a cash payment of INR 86.48 crore.
The combined share swap and cash arrangement values the company at INR 489 crore in terms of enterprise value. The equity value, after deducting debt, is estimated at INR 333.98 crore. Following the completion of the acquisition, Matrix will retain a 4.31% equity stake in the apparel exporting company.
This marks the second acquisition announced by Gokaldas in the present financial year. In August, the company unveiled its acquisition of Atraco, a UAE-based apparel maker.
Matrix, a lucrative enterprise, produces knitwear apparel for men, women, and children, catering to renowned global brands with a presence in Europe, the UK, and North America. The company efficiently runs four units in Gurugram and one in Ranchi.
According to the company’s vice-chairman, Siva Ganapathi, the agreement would enable Gokaldas to enter the knit apparel business segments, tap into an exclusive global customer base, enhance its presence in European and UK markets, achieve geographical diversification, and unlock potential for low-cost capacity expansion in the future.
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“While we are into woven fabric and more US-centric, Matrix makes premium embellished knitwear and Europe-focussed,” he said.
“The acquisition of Matrix is an important step for us as it is strategically relevant, possesses a good complementary customer base, operationally strong, and above all, it is a leader in its own sphere,” Ganapathi said.
“The acquisition will give us cross-selling opportunities. We are building our own modern knit mill at Erode in Tamil Nadu which we hope to commission in the next quarter. We will supply raw material from here to Gurugram and Rachi,” he added.
He expressed satisfaction as his company experienced a 6% year-on-year growth in export business during the December quarter, contrasting with a 12% decline in India’s apparel exports over the same period.
“We are bucking the trend though the overseas market is not that great. But we are seeing signs of buying sentiments picking up as the inventory in the US market is depleting.”
Gokaldas concluded the December quarter with a revenue of INR 559.8 crore, showcasing a 6% growth over the same period last year. However, the net profit for this quarter stood at INR 30.4 crore, indicating a year-on-year decline of 25%.
“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. 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,” Ganapathi said.
The company wrapped up the December quarter with a headcount of 32,000 people in India and 11,000 employees in Kenya and Ethiopia.
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