Grasim Industries Ltd, part of the Aditya Birla Group, is set to acquire the entire Indian subsidiary of Turkey-based fabric maker Soktas for Rs165 crore ($23 million at current exchange rates), it said in a stock market disclosure on Wednesday.
The transaction will be funded primarily from Grasmi’s internal accruals, and after the deal, Soktas India Pvt. Ltd (SIPL) will become a wholly-owned subsidiary of the manufacturing firm.
“The acquisition is in line with Grasim's linen business strategy to strengthen its presence in the premium fabric market,” said Thomas Varghese, business head of textiles at Aditya Birla Group.
SIPL is currently a wholly-owned subsidiary of the Soktas Group, which manufactures and markets fabrics. Its main facilities are located in Soke, Turkey.
SIPL sells premium fabrics in India under the ‘Soktas’, ‘Giza House’ and ‘Excellence by Soktas’ brands.
“We look forward to the ongoing success of our brands in the subcontinent and beyond,” said Muharrem Kayhan, chairman of the Soktas Group.
SIPL has its sole manufacturing facility at Kolhapur in Maharashtra, which has a production capacity of about 10 million metres per annum of finished fabric. By the end of 31 March 2018, SIPL reported revenue and EBITDA of Rs 186 crore and Rs 31 crore, respectively.
Grasim Industries is the flagship company of the Aditya Birla Group. It started out as a textiles manufacturer in India in 1947 and now specialises in manufacturing a cotton-like material called Viscose Staple Fiber (VSF).