The Blackstone group has agreed to acquire a 50.1 per cent stake in Gokaldas Exports, India’s largest garment manufacturer and exporter, from the firm’s founders, and has launched an offer
The Blackstone group has agreed to acquire a 50.1 per cent stake in Gokaldas Exports, India’s largest garment manufacturer and exporter, from the firm’s founders, and has launched an offer for an additional 20 per cent of the company’s shares.
Gokaldas produces highly customised apparel for leading US and European brands, with strengths in fashion and in-house design. Under the agreement, the founders of Gokaldas Exports will continue to lead the company, with Madanlal Hinduja as chairman, Rajendra Hinduja as managing director and Dinesh Hinduja as executive director.
Under the regulations imposed by the country’s securities regulator, the Securities and Exchange Board of India, the transaction triggers an open offer by Blackstone to the public shareholders of Gokaldas Exports for an additional 20 per cent of the company’s outstanding shares. Subject to regulatory approvals, Blackstone will invest a total of USD165m, including the cost of the open offer, and will obtain representation on the firm’s board of directors.
Based in Bangalore and listed on the Bombay Stock Exchange and National Stock Exchange, Gokaldas Exports was incorporated in 1979 and today has around 47,000 employees in 46 manufacturing facilities with a total production and export capacity of 2.5 million garments a month.
‘With its global reach and deep relationships, Blackstone is an ideal partner to help us realise our vision of building a global industry leader,’ says Rajendra Hinduja ‘Blackstone is a long-term partner and intends to work with us to deepen our customer relationships and accelerate our growth plan. With Blackstone’s relationships across the world, our customer profile is likely to get a significant impetus, taking the company to a higher growth trajectory.’
Akhil Gupta, chairman and managing director of Blackstone Advisors India: ‘Gokaldas is the leading company in India in an industry that has seen significant growth in the Asian region following the elimination of the garment quota regime in 2005.
‘This favourable industry dynamic, combined with our highest regard for the management team of Gokaldas Exports, was the key factor in our decision to enter into this partnership. We are looking forward to using our global network in contributing to the growth of the company in a meaningful way.’
Kotak Investment Bank acted as exclusive financial advisor for the transaction and is the manager of the open offer being made by Blackstone.
The Blackstone Group is one of the largest independent alternative asset managers in the world with businesses include the management of corporate private equity funds, real estate opportunity funds, funds of hedge funds, mezzanine funds, senior debt funds, proprietary hedge funds and closed-end mutual funds, as well as financial advisory services including mergers and acquisitions advisory, restructuring and reorganisation advisory and fund placement services.
