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Blackstone buys Gokaldas Exports

BS Reporters  |  Mumbai/Bangalore 

Global private equity giant Blackstone Group is acquiring majority control in Gokaldas Exports for nearly Rs 660 crore, in the country's largest management buyout in the textiles industry.
Blackstone will acquire a 70 per cent stake in Gokaldas through a two-step deal "" 50 per cent from the Bangalore-based Hinduja family and 20 per cent through an open offer to other shareholders. Kotak Investment Bank was the advisor to the transaction and is the manager for the open offer.
The deal will price one share of Gokaldas Exports at Rs 275, a 20 per cent premium over today's close of Rs 228.70.
However, Gokaldas's share price, like those of other textiles companies, has been hammered down from Rs 350 since the rupee started appreciating.
This is Blackstone's third major deal this year, the other two being a $275 million investment in Ushodaya Enterprises, which runs the Eenadu newspaper and ETV franchise, and a management buy-out of BPO firm Intelenet from Barclays and HDFC for Rs 840 crore.
Akhil Gupta, CMD of Blackstone Advisors India, said his company was attracted by the growth potential of Gokaldas. "With the abolition of the quota regime, the potential of Indian textiles exporters is huge," he added.
He said Blackstone would restructure the Gokaldas board after the open offer.
The founder promoters "" no relations of the Hindujas of the UK "" will continue to lead the Rs 1,000-crore company with Madanlal Hinduja as chairman, Rajendra Hinduja as managing director and Dinesh Hinduja as executive director.
"Blackstone is an ideal partner to help us realise our vision of building a global industry leader," said Rajendra Hinduja, adding, "Blackstone is a long-term partner and intends to work with us to deepen our customer relationships and accelerate our growth plan. This is likely to take the company to a higher growth trajectory."
Gokaldas Exports operates through 46 factories predominantly in Karnataka and supplies to global apparel like Nike, Adidas, GAP, Tommy Hilfiger and Abercrombie & Fitch.

First Published: Tue, August 21 2007. 00:00 IST