SPAL aims to acquire a 51.33% stake directly from Bannari Amman in Young Brand Apparel Private Limited, and concurrently, the company plans to undertake the acquisition of a 49% stake in YBAPL from joint venture partners.
SP Apparels Ltd (SPAL), a leading apparel manufacturer and exporter, has formally entered into a definitive agreement to acquire a 100 percent stake in Young Brand Apparel Private Limited (YBAPL), a subsidiary of Bannari Amman Spinning Mills Limited.
The acquisition encompasses the garment unit located at Palladam of Bannari Amman Spinning Mills Limited and a significant land and building parcel situated at SIPCOT (The State Industries Promotion Corporation of Tamil Nadu Limited), amounting to a total value of Rs. 223 crore.
SPAL aims to acquire a 51.33% stake directly from Bannari Amman in Young Brand Apparel Private Limited, and concurrently, the company plans to undertake the acquisition of a 49% stake in YBAPL from joint venture partners. To finance this substantial acquisition, SPAL will utilize a well-balanced combination of internal accruals and borrowed capital.
This strategic move is poised to enable SP Apparels to diversify its product offerings by leveraging the strengths of both entities, creating synergies that would contribute to an expanded customer base and reach in target markets. The acquisition of the land parcel is expected to play a pivotal role in augmenting SPAL’s manufacturing capacity, strategically positioning the company for future expansion.
SPAL Chairman and Managing Director, P Sundararajan, expressed enthusiasm about the developments, stating, “YBAPL will improve the cross-sell synergy in terms of customer base and product offerings, as we are working towards further penetrating the US market. The acquisition will not only strengthen our export spread but also lay a strong foundation for sustainable and resilient business growth for us.”
This strategic move aligns seamlessly with SPAL’s vision to diversify its presence in the textile and apparel industry, fortifying its export capabilities and establishing a more comprehensive and resilient business model. The company sees these acquisitions as a crucial step in enhancing market presence, broadening its product offerings, and ensuring sustainable growth in the long run.
Source:financialexpress.com