Deals

Blackstone buys into India’s largest clothing exporter

Blackstone is advancing toward a fourth acquisition in India in a year. The target is Gokaldas Exports, India’s largest apparel exporter by sales. The investment: $165 million for a control stake.

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The Blackstone Group has agreed to acquire a controlling stake in Gokaldas Exports, India’s largest garment maker and exporter, for $165 million (€122 million). Subject to regulatory approval, this transaction will be Blackstone’s fourth investment in India in the past year, according to a spokesman.

Blackstone has offered to acquire an initial 50.1 percent stake of Gokaldas at 275 Indian rupees a share, he said. In compliance with exchange regulations, the private equity offer has triggered an open offer for an additional 20 percent of the company’s outstanding shares – which are held by public shareholders.

Listed on the Bombay and National Stock Exchanges of India, Bangalore-based Gokaldas has 47,000 employees across 46 manufacturing facilities that have the capacity to produce and export 2.5 million garments a month. Gokaldas produces customized apparel for US and European brands, according to a statement.

The founders of Gokaldas will continue to lead the business with Madanlal Hinduja as chairman, Rajendra Hinduja as managing director, and Dinesh Hinduja as executive director. Their stake in the business, which they founded in 1979, will be trimmed to around 20 percent from 70.1 percent. Blackstone will have representation on the company’s board.

Rajendra Hinduja said: “With Blackstone’s relationships across the world, our customer profile is likely to get a significant impetus.”

Akhil Gupta, chairman and managing director of Blackstone Advisors India, said Gokaldas was well positioned in an industry that has seen significant growth in the Asian region since the elimination of the garment quota regime in 2005.

The other investments Blackstone has made in India are Ushodaya Enterprises, a media group, Emcure Pharmaceuticals and Intelenet Global Services, an outsourcing business. The US alternative asset investment giant opened an office in India in 2005, appointing Gupta as the chairman for the Indian private equity business to which $1 billion was allocated. This investment would bring the total amount Blackstone has invested in India to around $700 million, the local spokesman told PEO.