S P Apparels Announces Strategic Acquisition of Young Brand Apparel

Business

S P Apparels Announces Strategic Acquisition of Young Brand Apparel Pvt. Ltd. for INR 223 Crore

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• This acquisition will help SP Apparels to foray into intimate wear segment

• The land parcel is expected to boost SP Apparels’ future capacity expansion.

• YBAPL acquisition will add Rs 400 crore in revenue to SP Apparels in FY2024 -25

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S. P. Apparels Ltd, a leading India based apparel manufacturer and exporter, has signed a definitive agreement to acquire 100 percent equity stake of Young Brand Apparel Pvt. Ltd. (YBAPL) which is a subsidiary of Bannari Amman Spinning Mills Ltd. along with the garment manufacturing unit situated at Palladam and land and building situated at SIPCOT for a value of Rs. 223 crore (Approx.US$ 26.85)

Under a strategic acquisition initiative, SP Apparels to acquire a 51.33% stake of YBAPL from Bannari Amman and undertake to acquire remaining 48.67% stake from joint venture partners. SP Apparels to fund this acquisition through internal accruals and borrowed capital.

With this acquisition, SP Apparels shall have diverse product offerings and shall be able to leverage the strengths and expand its customer base in target markets. The land parcel which is part of the deal is expected to boost SP Apparels’ manufacturing capacity to fuel future expansion. YBAPL is a manufacturer and exporter of intimate wear for brands like American Eagle, Jockey, Marks & Spencer and Benetton. The company also exports to countries like the US, UK, Japan, and Canada. YBAPL had a top line of Rs. 329 crore for the financial year ended on March 31, 2023.

Commenting on the acquisition, P. Sundararajan, Chairman and Managing Director, S. P. Apparels Limited said, “YBAPL is a prominent name in the Intimate Wear manufacturing segment with a robust presence in key global markets and strong manufacturing capacity. The company is scaling up its business in markets like the US, UK, etc. It’s a strategically important acquisition which is in line with our vision to diversify into other textile and apparel categories, further strengthen our export basket, market presence, and build a more broad-based business model. YBAPL will improve the cross-sell synergy in terms of customer base and product offerings, as we are working towards further penetrating the US market. The acquisition will not only strengthen our export spread but also lay a strong foundation for sustainable and resilient business growth for us.”

It’s a strategically important acquisition which is in line with our vision to diversify into other textile and apparel categories, further strengthen our export basket, market presence, and build a more broad-based business model. YBAPL will improve the cross-sell synergy in terms of customer base and product offerings, as we are working towards further penetrating the US market. The acquisition will not only strengthen our export spread but also lay a strong foundation for sustainable and resilient business growth for us.

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