Filatex, which is into manufacture of branded socks for popular brands like Fila, VIP, Centro, Adam Phillip and Inmark, said it was considering buying opportunities in the online space for quite sometime to improve its business visibility and scale up turnover.
Keeping this in mind, the BSE-listed company has valued the e-commerce brand, which has 31,000-35,000 hits a month, at eight times its annual sales of Rs 2.5 crore.
“Going by the market trend, we saw the valuation attractive and would complete the acquisition in a month,” Filatex managing director Prabhat S Sethia said here today.
According to him, the deal would help them lift the sales more than two-fold to Rs 65-70 crore, as against Rs 30 crore it posted in the last fiscal.The acquisition involves a spending of Rs 80 crore from Filatex, including brand advertising, expansion of its manufacturing facility near here and others. Filatex is also planning to roll out its own socks brand Tuscany this calendar year.
For raising money to fund the deal, he said the company’s board had given its nod to go for preferential allotment for Rs 60 crore, involving 60 million shares at Rs 5 with a premium of Rs 5 per share. The process for this, he said, would be completed in a fortnight-to-one month.
Sethia said the company had a unique advantage in the market as there are not many producers of cotton socks in the country. He said even the Chinese foothold in this was negligible as they mostly are into dumping socks made from polyester and other similar products.