HOME TEXTILES

Indo count acquires home textile business of GHCL Limited for Rs. 576 crores

Indo Count Industries Limited, a leading manufacturer and exporter of Home Textiles has today entered into a Business Transfer Agreement (BTA) with GHCL Limited (GHCL) for acquisition of its Home Textile business at Vapi, Gujarat, on a going concern basis by way of a slump sale and Asset Transfer Agreement (ATA) for acquisition of specified assets of the US subsidiary of GHCL.

Mr. Anil Kumar Jain, Executive Chairman

In order to meet the growing demand and capture the business opportunities, the Company’s Board today approved a BTA with GHCL for the aforesaid acquisition which has a fully operational manufacturing facility of 45 million meters annually located at Vapi, Gujarat. The facility also has sufficient land to double the capacity in the future. The cost of acquisition is Rs. 576 crores.

This acquisition will catapult Indo Count to a leadership position in the Global Home Textiles Bedding segment:

  • With addition of almost 50% new capacity, Indo Count becomes the largest Home Textile Bedding company, globally, with annual capacity of approximately 153 million meters
  • Indo Count adds a whole new avenue of customer base which is untapped, thereby leading to gain in global market share
  • Leverage joint capabilities of Design, Innovation and Products to a wider spectrum of customers
  • De-risking manufacturing facilities with twin state geographical diversity
  • Potential addition of ~ Rs.1,300 – 1,500 Crores p.a. to the topline of the Company

Key features of the transaction:

  • The transaction includes acquisition of the Home Textile business of GHCL Limited as a going concern, on a slump sale basis, which includes its manufacturing facility at Vapi, Gujarat along with specified assets (inventory and intellectual property) of Grace Home Fashions LLC, US subsidiary of GHCL.
  • Overall purchase Consideration for the said transaction is Rs. 576 crores on debt and cash free basis subject to closing adjustments as agreed in the BTA and ATA
  • Acquisition will be funded through mix of internal accruals and debt
  • The transaction is expected to be consummated by March 2022 subject to necessary approvals and completion of Condition Precedents (CP) in the BTA

Edelweiss Finance & Investments Limited acted as transaction advisor and Khaitan & Co. acted as legal advisor to the transaction

Commenting on this acquisition, Mr. Anil Kumar Jain, Executive Chairman, said: “Today marks a landmark occasion for Indo Count with our Board approving the acquisition of the Home Textile business of GHCL. This is a significant step towards achieving a formidable leadership position in the Home Textile Bedding business ‘globally’. The new enhanced capacity will fuel growth for Indo Count to efficiently scale and serve a wider spectrum of customers and markets thereby increasing its global market share.

This strategy enhances our customer centric approach leading to increased flexibility and better service levels. Further, we will leverage the joint capabilities of design and innovation to offer complete sleep experience.

We welcome the new team to Indo Count’s family and look forward to utilize their skills and experience to achieve the Company’s long-term vision.”

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