Textile major S Kumars Nationwide Ltd (SKNL) is close to acquiring the tailor of US President Barack Obama. Hartmarx, the bankrupt US suitmaker, has accepted the bid of SKNL, along with British private-equity firm Emerisque Brands, according to this report. Emerisque Brands U.K. Limited and SKNL North America B.V will acquire the firm for a total sum of $119 million. Hartmarx, based out of Chicago, had recently come to fame when it custom made the tuxedo

Obama wore on Inauguration Day and the suit Obama wore on Election Night.

The offer by Emerisque and SKNL involves paying $70.5 million cash and a secured note worth $15 million. The two have also agreed to assume $33.5 million of Hartmarx liabilities. Hartmarx's biggest debtor is Wells Fargo. There are other players also in the race, who are interested in acquiring various brands and segments of the firm. Homi Patel is the Hartmarx Chairman and CEO.

The deal, also called a "stalking horse bid", which means an attempt by a debtor to maximize the value of its assets as part of or before a bankruptcy court-approved auction process. Hartmarx, which filed for Chapter 11 bankruptcy protection in January, could come under bankruptcy auction in June. Emerisque and SKNL have signed a breakup agreement, where Hartmarx will pay a $1.65 million break-up fee plus $2 million for expenses if it goes for a rival bid. Similarly, SKNL and Emerisque have agreed to pay $4 million termination fee if they abandon the bid.

S Kumars has been expanding its footprint across the world through its aggressive inorganic strategy. Last year alone it acquired around three firms. In May last year, it acquired a controlling stake in Italian fabric manufacturer, Klopman International. Then it also acquired Italian shirt fabrics maker Leggiuno SpA later last year. Another one of its acquisitions last year was Scottish fashion chain Internacionale.

To fund its inorganic strategy and expansion , the company has also been tapping private equity on a regular basis. S Kumars raised $220 million (Rs 900 crore) from Singapore's sovereign wealth fund GIC, who picked 25.4% in its subsidiary Reid & Taylor, last year. SKNL also raised $107 million from Hong Kong-based ADM Capital for itself and its retail arm Brandhouse Retail in 2007.

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