The Blackstone Group is investing as much as $165 million to buy up to a 70.1 percent stake in Gokaldas Exports Inc., India's largest apparel manufacturer and exporter.
Under the terms of the transaction, the private equity giant will acquire a 50.1 percent of the Indian firm from its founders. Under Indian law, the deal also triggers an "open offer" by Blackstone to the public shareholders of Gokaldas for another 20 percent of the company's outstanding shares. The company is listed in India on the Bombay Stock Exchange and the National Stock Exchange. The $165 million price tag includes the open offer. In addition, Blackstone has a seat on the Gokaldas board.
The companies said in a statement that the founders of Gokaldas will remain: chairman Madanlal Hinduja, managing director Rajendra Hinduja and executive director Dinesh Hinduja.
Based in Bangalore, Gokaldas was incorporated in 1979, and has 47,000 employees in 46 state-of-the-art manufacturing facilities. Gokaldas said it produces highly customized apparel for leading U.S. and European brands.
"With its global reach and deep relationships, Blackstone is an ideal partner to help us realize our vision of building a global industry leader," Rajendra Hinduja said in a statement.
"Gokaldas is the leading company in India in an industry that has seen significant growth in the Asian region post the elimination of the garment quota regime in 2005....We are looking forward to using our global network in contributing to the growth of the company in a meaningful way," Akhil Gupta, chairman and managing director, Blackstone Advisors India Pvt. Ltd., said in a statement.
Blackstone, which is led by co-founder and chief executive officer Stephen A. Schwarzman, went public in June amid intense publicity. But its share price has since dropped from a high of $38 to as low as $22.04. Blackstone shares closed Monday at $23.39, down 2.9 percent in New York Stock Exchange trading.
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