Ashok Piramal group to buy Italian brand

The Ashok Piramal group has signed a memorandum of understanding to acquire an Italian textiles brand.

Confirming this, sources close to the development said the group, among the oldest textile players in the country, would take two months to seal the deal. The foreign brand, they pointed out, could be Mens Club.

A top executive of the Ashok Piramal group, declined comments. " It's not our policy to comment on market speculation," he added.

Investment banking sources said the deal could cost nearly Rs 25 crore and added that the Mens Club brand would be valued at around Rs 55-70 crore.

"The significance of an Indian textiles company acquiring an Italian brand does not lie in the size of the deal. It shows that domestic players have made their presence felt in the global textiles scenerio," said an investment banker who had advised a textiles company in a similar foreign acquisition recently.

In June, Welspun took over Christy, a British towel brand, and textiles export firm Sarju International acquired designer brand Nick Hilton and outwear manufacturing company Gordon & Ferguson.

Ashok Piramal group's flagship, Morarjee Textiles, is building up an entire process of textiles manufacturing"" from weaving to readymade garment. Last year, it bought 49 per cent stake in Just Textiles.

Investment banking sources said Morarjee Textiles would be the Piramal group's vehicle for acquisition of Mens Club.

Morarjee has a Bangalore-based subsidiary Integra Apparels which is into readymade garments. It has outsourcing contracts with brands like Prada, Allen Solly, Louise Phillipe, Zodiac and Van Heusen.

Last year, Morarjee's income went up 15 per cent to Rs 170 crore while its net profit increased to Rs 10.45 crore.