Lilliput to sell stake to TPG Growth for Rs 115 cr

Kidswear maker and retailer Lilliput today said it will sell an undisclosed stake to private equity firm TPG Growth for around Rs 115 crore.

This will be second time the capital-based retail player dilutes stake within a week after agreeing to sell 31 per cent stake for around Rs 270 crore to private equity player Bain capital.

The company said one of its old stakeholders, Everstone Capital, will be exiting the company. Everstone had held an undisclosed stake in Lilliput since 2006.

"We are thrilled that Bain Capital and TPG Growth have decided to invest in Lilliput," Lilliput Kidswear Ltd Managing Director Sanjeev Narula said in a statement.
    
He said the company's experience of working with Everstone Capital encouraged it to continue to partner the two leading global private equity players to realise its goals.
    
"Apart from a primary infusion into the company, the transaction includes Everstone Capital exiting their early stage growth investment in the company," the statement said, adding that Ernst & Young acted as the advisor for the deal.
    
Last week, Lilliput had finalised a deal with Bain Capital to offload 31 per cent stake for a sum of around Rs 270 crore, thus, putting the total valuation of the firm at around Rs 870 crore.
    
Narula had said on the occasion he will continue to be the company's chief promoter and hold at least 55 per cent stake in the firm.
    
He had also said the capital raised from the stake-sale would be used to fund expansion plans, including opening 18 new stores of its large-format chain 'Lilliput World' by the end of this year.
    
"Bain Capital and TPG Growth's track record in backing world leaders and value creation speaks for itself and their significant investment is a strong vote of confidence in Lilliput's potential," Narula said.
    
The statement said the two PE firms will invest a total of USD 86 million (around Rs 385 crore) for "an undisclosed significant minority stake in the company."
    
Of the total, Bain Capital will invest USD 60 million (around Rs 270 crore) and TPG Growth will put in USD 26 million (around Rs 115 crore).
    
Lilliput operates 235 regular format stores in India, and 30 more outlets in nine foreign countries, which specialise in apparels. Besides, it also has one 'Lilliput World' outlet in Delhi. It also manufacturers and exports to global brands like Gap, Next, Carter's and Old Navy.
    
The company is also looking at almost doubling its turnover to Rs 800 crore by 2011-12, from Rs 415 crore last fiscal.