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Gokaldas Exports Ltd (GEL), through its wholly owned subsidiaries, has entered into an agreement to acquire Atraco Group (Atraco), an apparel manufacturer with market presence and customer relationships across the US and Europe, for $55 million. The equity value of the transaction will be funded through a mix of debt and internal accruals, according to the company.
The transaction, which involves acquisition of shares and assets, subject to regulatory approvals, is expected to be completed by Q3 FY24 (October–December 2023).
Founded in 1986, Atraco Group is headquartered in Dubai, UAE, where it has its marketing, sourcing, product development, and corporate functions. The company operates four manufacturing units in Kenya and one in Ethiopia, producing about 40 million garments annually.
Atraco Group’s revenue is approximately $107 million, with a profit after tax of $7.2 million for the calendar year 2022. It has more than 13,000 workers spread across multiple locations in Kenya, Ethiopia, and the UAE.
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“We have always believed in continuously adding production capacity at strategic locations, enhancing our value proposition to customers. The acquisition of Atraco is an important step in this direction as it is strategically relevant, possesses a good complementary customer base, and is operationally strong,” said Sivaramakrishnan Ganapathi, Vice-Chairman and Managing Director of Gokaldas Exports Ltd.
With this acquisition, Gokaldas will gain access to low-cost, duty-free locations for manufacturing and add 13,000 new members to the GEL family, he said.
Gokaldas Exports was supported by JM Financial Limited as a transaction advisor, Khaitan & Co as a legal advisor, and BDO UAE and BDO East Africa-Kenya as partners for due diligence.
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