Himatsingka pays $53mn for 80% stake in US co

Himatsingka Seide has completed the acquisition of 80% stake in Divatex Home Fashions, New York. This was consequent to signing definitive agreements in New York on July 1.

The enterprise value for the transaction was $75 million. The company acquired the 80% stake through its wholly-owned subsidiary, Himatsingka America, and will pay $53 million for the stake.

Divatex reported revenues of $151 million for the year ended December 31, 2006 with an EBITDA of $14 million. Divatex was established in 1991 by Avi Gross and Ayelet Gross. It is among the top three distributors of bed linen products in the US. The company is headquartered in New York, and operates a large warehousing and distribution facility out of South Carolina.

The acquisition follows the acquisition of Giuseppe Bellora SpA, Italy in February 2007. "It is in line with the Himatsingka strategy to forward integrate globally by acquiring high-end brands and large distribution networks in the home textile space. As Divatex is a large distributor of bed linen products, there will be significant synergies for sourcing requirements from the new $100 million bed linen facility of Himatsingka at the Hassan Special Economic Zone in Karnataka. The facility has commenced trial production and is likely to commence commercial production in July 2007," the company said in a statement.

Shrikant Himatsingka, executive director, Himatsingka Seide said: "Over the past year, Himatsingka has made significant investments in M&As, greenfield initiatives and organic expansions in its pursuit to emerge as an integrated global home textile company. Having completed two international acquisitions of Giuseppe Bellora and Divatex with combined revenues of approximately Rs 800 crore and the commencement or production at the Rs 400 crore bed linen facility, the company is positioned to achieve consolidated annualised revenue of over Rs 1,000 crore. We will continue to explore opportunities for inorganic growth in the branded home textile space."