Apparel manufacturer SP Apparels has agreed to acquire textile company Bannari Amman Spinning Mills’ intimate wear subsidiary Young Brand Apparel for a consideration of Rs 223 crore ($26.7 million).
According to a statement issued by SP Apparels, it will acquire Young Brand Apparel Pvt. Ltd, Bannari’s garment unit located at Palladam in Tamil Nadu. Additionally, it will buy the land located in the State Industries Corporation of Tamil Nadu (SIPCOT). The acquisition comes at a time when SP Apparels looks to expand in the segment and increasing its export basket.
S.P. Apparels will pay Rs 223 crore ($26.7) for the subsidiary Young Brand Apparel Private Limited (YBAPL), its garment unit at Palladam in Tamil Nadu, and the land and building located in The State Industries Promotion Corporation of Tamil Nadu Limited (SIPCOT) as a part of the agreement, the company said in a statement.
“YBAPL is a prominent name in the Intimate Wear manufacturing segment with a robust presence in key global markets and strong manufacturing capacity. The company is scaling up its business in markets like the US, UK,” said P. Sundararajan, Chairman and Managing Director, SP Apparels.
YBAPL is a joint venture between Jacob Industries (USA) LLC, Intimark of Mexico and Bannari Amman, with a presence in the USA. It had reported a turnover of Rs 326 crore for the year ended March 2023.
It’s a strategically important acquisition which is in line with our vision to diversify into other textile and apparel categories, further strengthen our export basket, market presence and build a more broad-based business model,” he said.
SP Apparels will fund the acquisition through a combination of internal accruals and borrowed capital. It will buy 51.33% stake from Bannari Amman and the remaining from joint venture partners.
“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,” Sundararajan added.
Established in 1989, SP Apparels makes products for children and women as well, and exports to large retailers in Europe and the US. The product range for knitted garments for infants and children includes body suits, sleep suits, tops and bottoms. The Coimbatore-based company, once part of private equity firm Jacob Ballas Capital’s portfolio, went public in 2016.