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Celebrity Fashions acquires ACL's trouser unit

06 Dec '05

2 min read

Garment manufacturer Celebrity Fashions Ltd announced that the company has entered into an agreement with Ambattur Clothing Ltd (ACL) to buy the latter's six million pieces-a-year trouser unit.

The deal, it is learnt, will be struck at Rs 80 crore. Celebrity will pay Rs 45 crore from the impending IPO proceeds, while the rest will be paid over a three-year period in three equal installments. The effective date for the acquisition is April 1, 2006.

V Rajagopal, CMD of Celebrity stated that the acquisition will help us reduce the time lag by three years. It also adds big international brands like Banana Republic, GAP, Levis, Ann-Taylor, LL Bean, Eddiebauer, and Kahls to our portfolio as ACL was servicing these clients out of that facility.

The unit, which is in, Madras Export Processing Zone (MEPZ), enjoys a tax holiday up to assessment year 2009-10. The revenues from this unit were around Rs 210 crore. It has a capacity to make six million trousers.

ACL was promoted by Vijay Mahtaney who is better known for creation of ColorPlus brand, which is now under the Raymond belt.

Besides this, Celebrity, which had plans of setting up its own trouser unit in an apparel park in Sriperumbudur will change its plans and set up a top (shirt) making unit. The investments envisaged for this plant, which will go on stream by February 2006, is Rs 25 crore.

Celebrity is in the process of raising fund from an IPO. It is offering 45.5 lakhshares in a 100% book-built issue. The company, which clocked revenues of Rs 135 crore and a profit after tax of Rs 5.8 crore, is likely to raise around Rs 80 crore through this issue.

Celebrity Fashions is located in Chennai which exports garment also.

The Times of India

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