In a transaction of Rs 1,650 crore, Aditya Birla Fashion & Retail Ltd (ABFRL) said on Friday that it will buy the bulk of the stock in the women's branded clothing firm TCNS Clothing.
According to a joint announcement, the Aditya Birla group company has gone into negotiations to buy a 51% investment in TCNS Clothing, which owns ethnic brands including W, Aurelia, Wishful, Folksong, and Elleven.
According to the agreement, it would combine with TCNS Clothing after acquiring the original promoter's shareholding via a share purchase agreement (SPA) and a conditional public open offer.
One of the biggest transactions in the Indian fashion industry, according to the announcement, the promoter share and open offer consideration for TCNS were valued at Rs 1,650 crore for a 51% interest.
For the fiscal year that ended on March 31, 2022, TCNS Clothing generated a revenue of Rs 896.05 crore.
“The acquisition is in line with the company's objective of building a comprehensive fashion portfolio across consumer segments and price points,” the statement said.
The purchase is also contingent on regulatory clearances from the National Company Law Tribunal (NCLT), SEBI, stock exchanges, and Competition Commission of India (CCI), as well as approval by the necessary majority of ABFRL shareholders, according to the statement.
The business anticipates that the transaction will close in 9 to 12 months.
According to the aforementioned, TCNS and ABFRL would combine under a merger plan in which TCNS's public shareholders (as of the merger's effective date) will get 11 shares of ABFRL for every 6 shares they now own, the statement said.
ABFRL said that it is “at a consideration of Rs 503 per sale shares, subject to adjustments under the SPA” in relation to the cost of acquisition or the price at which the shares are purchased.
Furthermore, the “open offer is being made at Rs 503 per equity share, which has been determined in accordance with SAST Regulations,” according to the announcement.
According to the open offer, ABFRL “will acquire up to 29 percent of the Expanded Share Capital, subject to Minimum Level of Acceptance,” it was stated.
Aditya Birla Group Chairman Kumar Mangalam Birla commented on the news, stating that for ABFRL, the TCNS transaction is truly an important milestone as it complements its current portfolio of excellent brands across the whole spectrum of Indian fashion.
“By embracing the well-liked women's ethnic brands in TCNS's portfolio, we are reaffirming our dedication to ethnic wear, the biggest segment of the clothing market. The rapidly expanding ABFRL platform is prepared for the next stage of transformative development with this purchase, he added.
Anant Daga, managing director of TCNS, said, “We have developed India's most prosperous women's franchise over the past 20 years on the strength of our top brands. We will be able to fully fulfil this potential thanks to our cooperation with ABFRL and the market's ongoing long-term growth chances.
“ABFRL's proven brand-building capability, distribution strength, and strong ecosystem of partners will help our brands into its next phase of growth and profitability,” the executive said.
For the fiscal year that concluded on March 31, 2022, ABFRL generated revenue of Rs. 8,136 crore. It is the country's first pure-play fashion powerhouse valued at $1 billion.
As of March 31, 2022, the firm has a network of 3,468 outlets and was present at 6,515 points of sale in department stores around India.
The biggest brands in India are represented in its line-up, including Peter England, Allen Solly, Van Heusen, and Louis Philippe. It also owns Pantaloons, a well-known apparel store business.
Additionally, it sells a variety of foreign brands under its own name and has long-standing exclusive affiliations with Ralph Lauren, Hackett London, Ted Baker, Fred Perry, Forever 21, American Eagle, and Reebok.
It owns brands including Marigold Lane, Tasva, and Jaypore in the ethnic apparel industry.
Additionally, Shantanu & Nikhil, Tarun Tahiliani, Sabyasachi, and the House of Masaba are key partners of ABFRL.