Himatsingka Seide acquires 80% stake in Divatex, USA

Himatsingka Seide Ltd has announced that it has completed the acquisition of an 80% stake in Divatex Home Fashions Inc. New York. This was consequent to signing definitive agreements in New York on July 01, 2007.

The enterprise value for the transaction was USD 75 MM. The Company has acquired the 80% stake through its wholly owned subsidiary, Himatsingka America Inc., and will pay USD 53 MM for this stake.

Divatex reported revenues of USD 151 MM for the year ended December 31, 2006 with an EBITDA of USD 14 MM. Divatex was established in 1991 by Mr. Avi Gross and Ms. Ayelet Gross. It is among the top three distributors of bed linen products in the US.

This acquisition follows the acquisition of Giuseppe Bellora SpA, Italy in February 2007. It is in line with the Himatsingka strategy to forward integrate globally by acquiring high end brands and large distribution networks in the home textile space. As Divatex is a large distributor of bed linen products, there will be significant synergies for sourcing requirements from the new USD 100 MM bed linen facility of Himatsingka at the Hassan Special Economic Zone in Karnataka. The facility has commenced trial production and is likely to commence commercial production in July 2007.

The Company is headquartered in New York and operates a large warehousing and distribution facility out of South Carolina

Mr. Shrikant Himatsingka, Executive Director of the Company, said "Over the past year, Himatsingka has made significant investments in M&A, green field initiatives and organic expansions in its pursuit to emerge as an integrated global home textile company. Having completed two international acquisitions of Giuseppe Bellora and Divatex with combined revenues of approximately Rs 800 crores and the commencement or production at the Rs 400 Cr bed linen facility, the company is positioned to achieve consolidated annualized revenues of over Rs 1000 crores. We will continue to explore opportunities for inorganic growth in the branded home textile space."

Mr. Dinesh Himatsingka, Managing Director of the Company said "Himatsingka will continue to create and strengthen its manufacturing capabilities in India while enhancing its global distribution strengths through acquisitions."

Source : Equity Bulls

Keywords