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Grasim to acquire Soktas India

Mar 11, 2019
Grasim to acquire Soktas India

Grasim Industries Limited has signed a definitive agreement to acquire 100 per cent equity shareholding of Soktas India Private Limited (SIPL) for an enterprise value of Rs 165 crore, subject to net debt and working capital adjustments, as of the closing date. The transaction will be funded by the company primarily out of internal accruals.

SIPL is currently a wholly-owned subsidiary of Söktas Tekstil Sanayi ve Ticaret AS, a well-known producer and marketer of fabrics, with its main facilities in Soke, Turkey. Upon completion of the transaction, SIPL will become a wholly-owned subsidiary of Grasim.

SIPL is in the business of manufacturing and the distribution of premium cotton fabrics. Its state-of-the-art manufacturing facility is located at Kolhapur in Maharashtra. Its plant capacity is about 10 million metre per annum of finished fabric. SIPL sells premium fabrics in India under the Söktas, Giza House, and Excellence by Söktas brands. The company is also a preferred supplier to leading Indian and global menswear brands. In fiscal ending March 2018, SIPL reported revenue and EBITDA of Rs 186 crore and Rs 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, accompanied with 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,” said Thomas Varghese, Business Head – Textiles, Aditya Birla Group.

“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, Söktas Tekstil Sanayi ve Ticaret AS.

As one of India’s top linen fabric manufacturers, Grasim already has a significant presence in India’s premium linen fabric market, through its leading brand ‘Linen Club’. Linen Club has given the evolving Indian fashion industry an edge, which will be further bolstered by the Söktas, Giza House, and Excellence by Söktas brands.