House of Pearl acquires Gurgaon-based Texport Fashions

Apparel company House of Pearl Fashions Limited has acquired textile exports firm Texport Fashions, for just above $1 mn. Texport will exclusively handle orders from departmental store chain JC Penny of the US. House of Pearls is also looking to acquire another facility in Bangladesh.

The new Gurgaon-based facility will also be used by the House of Pearl for servicing its international clients. It has recently received an order of $8-10 mn from JC Penny and the entire production at the newly acquired unit would be used to meet this demand. House of Pearl has concentrated on the woven segment till now but the acquisition of the Gurgaon facility would help it establish a stronghold in the knits segment as well and would also contribute $15 mn to the company.

With regards to the unit at Bangladesh, where House of Pearls already has a presence, the company may run the facility with a joint venture partner with the details to be worked out in a month's time.

Read The Economic Times article.

The Tata Group restructures shareholding pattern in North Indian Plantation Operations

The shareholding pattern of Amalgamated Plantations Private Limited (APPL), the new company formed by Tata Tea after restructuring its North Indian Plantation Operations (NIPO), is close to finalization. The Tata Group will hold 33-35% in APPL through Tata Investment Corporation (15%) and Tata Tea (18-20%). IL&FS and the World Bank private equity firm IFC will hold 20% stakes each in APPL, while consultancy firm Globally Managed Services will hold 12%. The balance 13-15% will be held by employees and workers of the company.

The company has received SEBI approval for the formation of APPL. Once we get shareholders’ approval, the company will come into existence with effect from April 1, 2007. The transaction process, however, remains to be completed.

Read more in The Economic Times article.
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US paints company Sherwin-Williams to acquire Nitco Paints

Cleveland-based, US paint major Sherwin-Williams marked its maiden entry into the fast-growing Indian paints market by agreeing to acquire Nitco Paints, an unlisted unit of Nitco Tiles, for an undisclosed amount, assumed to be on the lower side of Rs. 200 crores. Sherwin-Williams has also paid an undisclosed sum towards maintaining ties with flagship company and group concern Nitco Tiles. Nitco Tiles is expected to benefit due to the symbiotic relationship between tiles and paints and a common customer base. The Indian management would be retained for now to enable Sherwin-Williams to have a better understanding of the local market. Later, the company would explore the products and technologies to be introduced in India.

Nitco Paints makes and sells exterior specialty paints in western India through a network of about 3,000 dealers. It posted sales of Rs. 80 crores last year. The acquisition will give the US-based company an established presence in the Indian paint industry, which has historically grown by 1.5 to 2 times of the Indian GDP on a year-to-year basis.

Sherwin-Williams is present in other emerging markets such as China, Uruguay, Brazil and Argentina. The company has a distribution network in 20 other countries through wholly-owned subsidiaries, joint ventures and licenses of technology, trademarks and trade names.

Read The Economic Times and the Business Standard articles.
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Hershey forms JV with Godrej Foods; acquires 51% stake in latter

Renowned US-based chocolate maker Hershey has announced a joint venture with Godrej Beverages and Foods Limited, a subsidiary of diversified conglomerate Godrej Industries. The JV, named Godrej Hershey’s Foods and Beverages Limited, would manufacture and distribute confectionery, snacks and beverages across the country.

Under the deal, Hershey will acquire 51% stake in Godrej Beverages and Foods for $60 mn. The parent company Godrej Industries and Hershey will hold 43% in the new venture, and the remaining 6% will be held by JV CEO A Mahendran. Hershey is acquiring 40% from IL&FS which is exiting the venture. Hershey would license to Godrej Foods some of its trademark rights for $2 mn, in addition to royalty payments of less than 5% for domestic sales and 8% for exports. Hershey may also use the facilities of GBFL as a manufacturing base for the company in India. The new entity would get two of Godrej Foods’ existing manufacturing facilities at Mandideep and Chittur.

Read more in The Economic Times article.
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SCA and Godrej Consumer Products form JV for hygiene products in India

Swedish consumer and paper goods company SCA and Indian FMCG major Godrej Consumer Products Limited are forming a 50:50 JV, christened as Godrej SCA Hygiene Limited, for the manufacturing and marketing of absorbent hygiene products such as sanitary napkins and baby diapers, in India, Nepal and Bhutan. The joint venture is being set up with an equity capital of Rs. 20 crores through equal investments by both the companies.

For more details, read the press release here.

ADM Capital to invest $107 mn in textile firm S Kumar's and retail arm Brandhouse

Hong Kong-based private equity firm ADM Capital is investing $107 mn into textiles firm S Kumar's Nationwide Limited and its retail arm Brandhouse Retail. ADM will invest $82 mn to acquire a 10% stake in S Kumar's and $25 mn will be invested in Brandhouse Retail for another 10% stake in the company. S Kumar's will issue convertible warrants to ADM Capital. The deal values the S Kumar's share at Rs. 82.5, while the Brandhouse Retail share has been valued at Rs. 85. S Kumar's will utilize $30 mn to repay lenders, while $52 mn will be used to fund capital expenditure plans.

S Kumar's is a Mumbai-based Rs. 1000-crore textiles and apparel conglomerate. It operates in the worsted, ready-to-wear, consumer textiles, home textiles segments. Brandhouse Retail, which was de-merged from S Kumars, will utilize the entire $25 mn to fuel growth plans. It is also expected to be listed on the exchanges as a separate entity by August. Brandhouse will invest Rs. 400 crores to open 1000 stores across the country over the next three years. It owns and operates S Kumar's apparel and textile showrooms and manages international brands such as Dunhill, Escada and Stephens Brothers.

Read more in the DNA Money article.
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Dabur to buy 60% stake in Singapore-based FMCG company Unza for Rs. 675 crores

Dabur is about to acquire over 60% stake in Singapore-based consumer goods company Unza Holdings for Rs. 600-675 crores. Dabur is expected to buy out the holdings of private equity funds Actis and Standard Chartered who hold 30% each in the $150 mn-Singapore company. The deal is touted to be one of the largest overseas acquisition deals in the FMCG space, and make it the third-largest FMCG company in India behind HLL and ITC with manufacturing facilities in China, Vietnam, Indonesia and Malaysia.

Unza is a leading personal care manufacturer and marketer in South-east Asia with 48 brands in its portfolio, and is equally owned by the company management and the two private equity funds.

Read more in The Economic Times article.

Ujala maker Jyothy Laboratories plans Rs. 300 crore-IPO

Mumbai-based fast moving consumer goods company Jyothy Laboratories, famous for its Ujala brand of fabric whiteners, is planning to list on the stock exchanges by end of 2007. Jyothy Laboratories will raise Rs. 300 crores in an initial public offering. The company has reportedly appointed Kotak and Enam as advisors to the issue.

Jyothy Labs is a closely held company with about 70% stake being held by founder chairman and managing director M P Ramachandran and his family. The balance 30% is held by private equity firms CLSA and Actis along with a foreign subsidiary of ICICI Bank. The foreign investors are likely to exit the company at the time of the IPO.

Sales of Jyothy Laboratories are pegged at between Rs. 400-500 crores. The company is said to have been valued at around Rs. 1000 crores.

Read more on Moneycontrol.com.

Textile firm RSWM picks up 48.17% in Cheslind Textiles for around Rs. 28 crores

Rajasthan Spinning and Weaving Mills (RSWM), an LNJ Bhilwara Group textile company, has acquired a 48.17% equity stake in Bangalore-based Cheslind Textiles from its promoters for Rs. 27.8 crores. Cheslind is a 100% export-oriented unit manufacturing cotton yarn with a turnover of about Rs. 120 crores. Post-acquisition, RSWM would become one of the top yarn manufacturers in terms of the number of spindles. ICICI Securities was the advisor for this transaction.

RSWM is also making an open offer for acquiring another 20% of Cheslind at a price of Rs. 25 per share, at a 16% premium to Cheslind’s closing market price on the bourses. A successful open offer would take the cumulative acquisition cost for 68.17% equity stake in Cheslind Textiles at Rs. 39.3 crores. The acquisition will be financed through internal accruals.

The acquisition brings in a basket of products including super fine count cotton yarns and would also provide RSWM with an established foothold in the international market. The deal would bring an additional 64,500 spindles under RSWM taking its total spindlage to about 360,000 spindles, pegging it amongst the top yarn manufacturers in the country.

Read the article in The Economic Times.
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Spices company McCormick planning to acquire Indian spice firms Eastern, Lalah's

US-based McCormick, the world’s largest spice and seasoning company, is scouting for other Indian companies after its failure to buy MTR Foods, later bought by Orkla Foods of Norway. McCormick is looking at some other South-based spice brands such as Eastern and Lalah’s.

The Rs. 170 crore-Eastern is one of the bigger local players in the packaged spices market. Eastern, with a predominant presence in the southern markets, has been interested in a better national spread through the inorganic route. Private equity firm New Vernon is already an investor in the company. It’s learnt that the McCormick team had also visited other players in the packaged spice market such as MDH and Lalah's.

McCormick’s joint venture company in India, the Kochi-based AVT McCormick, engaged in processing and exports of spices, is reportedly helping the US company with its acquisition plans. McCormick’s Indian JV, which kicked off in 1994, exports Rs. 100 crores worth of value-added spices to developed markets. AVT has over eight decades of experience in agri-business including rubber, tea and a portfolio of spices.

Read The Economic Times article.

ITC Foods to bid for UK’s pickles and spices brands Patak’s

ITC Foods may turn out to put in a formal bid for Britain’s popular pickles and Indian curries brand Patak’s. Heinz, which already has a partnership with Patak’s, is also said to be interested in the company. The valuation of Patak’s has been put around £200 mn, which is considered to be bit pricier for potential partners or buyers. ITC Foods has been approached by Patak’s investment banker NM Rothschild with a proposal.

Read more in The Economic Times article.

Times Group to acquire 667,000 shares in textile firm Sumeet Industries

Bennett, Coleman & Company Limited (BCCL) has entered into an agreement to acquire 667,000 equity shares in Surat-based textile firm Sumeet Industries. Sumeet is a public-listed company engaged in the manufacturing and export of synthetic textile yarn and export of yarn and fabrics. The funds raised may be used to fund the company’s expansion plans that include increasing its polyester spinning capacity from the existing 12,000 tonne per annum to 56,000 tonne per annum. They are also setting up another 10 lines of polyester spinning plant with an annual installed capacity of 44,000 tonnes.

The company is also planning to develop an industrial park for medium & small industries near Kandla port in Kutch. The company owns 55 acres of land in this area and will be adding another 200 acres on which they will set up the infrastructure like roads, water and power supply.

Article in The Economic Times.

Havell's acquire German lighting firm Sylvania for $300 mn

Havell's India has acquired Germany’s SLI Sylvania's lighting business for $300 mn (about Rs. 1350 crores) in an all-cash deal, from a group of private equity firms. This is the biggest overseas takeover by an Indian electrical equipment manufacturer in the lighting business.

The acquisition was made through Havell’s Dutch subsidiary, Havell's Netherlands BV and would be funded through a mix of debt and internal accruals. The combined revenues are expected to be $1 bn. Deutsche Bank was the advisor to Havell’s on the transaction and Barclays Capital would provide the financing to the deal.

SLI Sylvania operates in key geographies of Europe, Latin America and Africa through 10 manufacturing facilities. The company would get access to all of Sylvania's markets across the world except Mexico, US, Australia and New Zealand where the business is owned by German lighting firm Osram, one of the largest lamp manufacturers in the world. Sylvania Osram had sold its lighting business to a consortium of three private equity funds comprising Subros, JP Morgan and DDG Capital and Havell's has acquired the business from this consortium.

Read more on this in Moneycontrol.com.
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Future Capital invests Rs. 20 crores in Biba Apparels

Future Capital, the financial arm of the Future Group, has picked up a minority stake in Mumbai-based Biba Apparels Private Limited for Rs. 20 crores, reportedly in the range of 7-15%. The investment is learnt to be in the form of convertible debentures. Biba Apparels retails ethnic women’s wear at multi-brand outlets like Shoppers’ Stop and Lifestyle and at 42 Biba exclusive outlets in Mumbai, Delhi, Hyderabad and Bangalore. Biba’s projected revenues for the current fiscal are about Rs. 60 crores. It plans to expand in the national capital region (NCR), Chandigarh, Ahmedabad, Surat and Kolkata.

Biba has tied up with the Dubai-based retailer Lulu for its overseas foray. The apparel retailer plans to open 20 Biba outlets in Dubai in the next three months, for which it is in the process of identifying locations and getting its label registered. It is also learnt to be in talks with Reliance Retail for supplying a value apparel brand, priced lower than Biba.

Future Capital manages the private equity fund, Indivision Capital, and real estate funds Kshitij and Horizon. Apart from the investment in Biba Apparels, Future Capital also has some small real estate investments. Indivision had recently invested Rs. 50 crores in health and wellness chain VLCC and earlier picked up a 26% stake in construction firm BE Billimoria.

Read the article in The Economic Times.

Italian coffee company Lavazza buys Barista Coffee Company and Fresh & Honest Café for $125 mn

Lavazza, Italy’s largest coffee company with a turnover of $1.2 bn has acquired coffee chain Barista Coffee Company and coffee vending business Fresh & Honest for an estimated combined valuation of around $125 mn. The two coffee businesses belonged to the Chennai-based Sterling Infotech Group, controlled by NRI takeover tycoon C Sivasankaran. Lazard was the financial advisor to Lavazza on the deal.

C Sivasankaran had bought 65% in Barista from Turner Morrison three years ago, and later purchased the remaining 35% stake from the Tata Group. His Sterling Group was learnt to have paid around Rs. 65 crores for the acquisition of 100% in Barista. Sivasankaran had put the coffee chain on the block in August last year and had appointed Standard Chartered to look for a buyer.

Lavazza earns two-thirds of its annual turnover from packet sales of roast-and-ground coffee powder and the balance from out-of-home cafe and vending business. The company sells packet coffee under the Lavazza brand name through 24,000 outlets in 80 countries. It imports 12% of its total coffee beans from India.

Read the articles in Business Standard and The Economic Times.
Related Link: Lavazza to pump in Rs. 600 crores in Barista

Indian management conducts buyout of Whyte & Mackay’s Indian operations

The Indian management of Scotch giant Whyte & Mackay’s Indian subsidiary Kyndal India has conducted a management buyout of the latter. The MBO was led by the Indian chief Siddharth Banerji. Mr. Banerji was part of the management buyout of Whyte & Mackay in 2001, then backed by current owner of Whyte & Mackay Mr. Vivian Immerman, who later took charge of the Scotch major. Mr. Banerji has acquired Kyndal India giving him control over the regional distribution of global spirits brands like Remy Cointreau and Absolut Vodka amongst others. The details of the transaction have not been disclosed.

Kyndal will not be involved in the domestic operations of Whyte & Mackay. The deal comes in the wake of the Vijay Mallya-led UB Group’s advanced stages of talks to acquire Glasgow-based Whyte & Mackay for about $1 bn. It is learnt that the trading company Kyndal, which is former name of Whyte & Mackay, has a gross turnover of about Rs. 80 crores.

Kyndal would now be positioned as a brand distribution and marketing company focusing on the emerging lifestyle segments of the premium spirits market. Besides Remy and Absolut, Kyndal will also handle the malt spirits portfolio of another Scotch major Morrison Bowmore, which is controlled by Japan’s Suntory. Kyndal is also expected to unveil partnerships with Dutch liqueur company Lucas Bols and a not-yet revealed French entity to bring in premium brandy. The company has bought out the regional brand rights of economy scotch brand Kilt, which is likely to be locally bottled sometime in future.

Read more in The Economic Times article.

Sherwin Williams pursuing business options with Nitco Paints

US-based paints company Sherwin Williams is believed to be in advanced stages of talks with Nitco Paints, an associate company of Mumbai-based Nitco Tiles, for a possible business tie-up. Nitco Tiles is engaged in the building business. Sherwin Williams is pursuing various options like joint venture, buyout and a joint holding company.

Sherwin Williams is the second-largest paint company in the world. Its entry in India is expected to change the dynamics of the colour space in the country, which is currently dominated by biggies like Asian Paints, Berger, Kansai Nerolac, ICI Paints and Shalimar. The paints segment in India is growing at an average 15%.

Read the article in DNA Money.

In a related development, Nitco Tiles Ltd also plans to spend $25-30 mn to acquire stake in a Chinese tile manufacturer within the next two months. Nitco will use the capacity in China to cut costs and to export tiles to other countries directly. The acquisition will be financed out of a proposed Rs. 250 crore-issue of securities to overseas investors or to qualified institutional buyers. The company has already obtained shareholder approval for the issue.

Read more on this in The Economic Times.

Textile firm RSWM planning acquisitions in India, Europe

LNJ Bhilwara group company Rajasthan Spinning and Weaving Mills Limited (RSWM) is planning to make two acquisitions in the next three months: one in India and the other abroad. RSWM is close to acquiring a specialized yarn maker in Europe for €6 mn and a domestic spinning having capacity of 100,000 spindles for Rs. 200 crores. Senior company officials are believed to be in Europe as part of negotiations to seal the European deal.

RSWM is a leading integrated player in the textiles sector. It is also contemplating entering the retail sector and has plans to double yarn capacity to 400,000 spindles. RSWM is also eyeing the high-end denim market in India and overseas for its new product line in denim. The company will invest Rs. 900 crores over the next three years to establish a power plant, enhance yarn capacities, set up a state-of-the-art 27 mn metres per annum denim operations and other initiatives.

The company fabric production is exported to 60 countries, including the Middle East, Europe and the US. It has registered a turnover of Rs. 770 crores in the last fiscal.

Read the article in DNA Money.

Himatsingka Seide completes Bellora acquisition for Rs 116 crores

Bangalore-based silk fabric manufacturer Himatsingka Seide has concluded its 70% stake acquisition in Italian bed linen brand Giuseppe Bellora SpA. The valuation of the acquisition is €20 mn (Rs. 116 crores). The equity value of the transaction is €13 mn (Rs. 75.4 crores) while Bellora has a debt of €7 mn (Rs. 40.6 crores).

Established in 1883, Bellora has presence across leading European department stores along with brand stores. Himatsingka Seide plans to capture the value market taken by the retailers by opening Bellora stores in the US and European markets. Currently Bellora is retailed through 17 owned stores and 350 retail points.

In June 2006, Bellora closed down its own manufacturing facility for restructuring initiative. Henceforth the sourcing for the brand will be undertaken from Himatsingka's production facility at Hasan, Karnataka, which has a manufacturing capacity of 200 mn metres.

Continuing its acquisition strategy, Himatsingka is in talks with other bed linen brands in the US and UK, which are expected to be completed in a couple of months. During the quarter ended December 2006, Himatsingka Seide registered total income of Rs. 53 crores with a net profit of Rs. 15 crores.

Read the article in Business Standard.
Related Post: Himatsingka to acquire majority stake in Italian textile brand Bellora

Zicom eyes overseas acquisitions, venture capital funding

Zicom Electronic Security Systems Limited, a Rs. 100 crore, Mumbai-headquartered listed electronic security equipment maker, may conclude two overseas acquisitions, one in China and the other in a nearby country, by May-June 2007.

The acquisitions will be in the range of Rs. 30-35 crores each and will be funded through the company's internal accruals and proceeds of the $11 mn FCCB issue which it had floated in September 2005.

Zicom presently enjoys around an 18% market share in the domestic electronic security equipments segment. Zicom may acquire a 49% stake in a firefighting equipment manufacturing company in a nearby country. The acquired company enjoys an order-book position of Rs. 75 crores and its products will be introduced into the Indian market under the brand name of that company so that the high brand value of Zicom in the Indian electronic security space does not get diluted. In China, Zicom is looking at a JV or a complete buy-out of a firm manufacturing electronic security equipment.

Presently, Zicom sources its components from various players before assembling them into a product. Earlier, this business was mainly restricted to corporates but now it has expanded to cover many other segments as well such as railways, buses, airports and ports which would need highly sophisticated electronic security equipment to meet emerging threats.

The company is also scouting for venture capital funding to fund its retail foray. The company has already opened 11 shops showcasing its products and plans to open 20 more within the next two months.

Read The Economic Times article.