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Mumbai/Bangalore, Aug.20 Global private equity major Blackstone Group has agreed to acquire the Bangalore-based Gokaldas Exports Ltd, one of India’s largest garment manufacturers and exporters, for about Rs 676 crore (including 20 per cent open offer).

Blackstone will pay Rs 275 per share for acquiring 50.1 per cent stake in the company from the promoters, who will continue to hold 20 per cent.

The company’s share on the BSE closed nearly 2 per cent higher at Rs 228.

As per SEBI norms, Blackstone will have to make a public offer to acquire an additional 20 per cent stake in the company. Gokaldas is listed on Bombay Stock Exchange and National Stock Exchange.

“Even though we will hold 20 per cent of the stake, we still get to run the company and that is a big plus for us. Blackstone will only have three members on the board,” said Mr Rajendra Hinduja, Managing Director.

“We will utilise the money from the stake sale in our SEZ project. Blackstone has deep pockets and has stakes in several big textile companies, which will help our business to grow. We may even look at acquiring companies in emerging markets.”

Mr. Madanlal Hinduja will continue to be the Chairman and Mr. Dinesh Hinduja, Executive Director.

Mr. Akhil Gupta, Chairman and Managing Director, Blackstone Advisors India, said: “Gokaldas is the leading company in an industry that has seen significant growth in the Asian region, post 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 key factors 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.”

Gokaldas Exports was incorporated in 1979 and has 47,000 employees in 46 manufacturing facilities with a capacity to produce 2.5 million garments a month.

Kotak Investment Bank is the financial advisor for the transaction and the manager to the open offer to be made by Blackstone. Gokaldas Exports has reported a net profit of Rs 10.52 crore and sales of Rs 261 crore for the quarter ended June 30, 2007.

More Stories on : Mergers & Acquisitions | Foreign Institutional Investors | Open Offers | Readymade Garments

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