Globally, in the last two years, there has been a flurry of activity in the Mergers and Acquisitions (M&A) space. Industry experts have put it down to the fact that as multinationals have the funds, they want to expand their current businesses and hence, there has been an acceleration in M&A deals.
The practice of mergers and acquisitions has attained considerable significance in the contemporary corporate landscape, which is broadly used for reorganising business entities. Post the introduction of economic reforms in 1991, Indian industries faced several challenges, both nationally and internationally. The cut-throat competition from international markets forced the Indian companies to opt for merger and acquisition strategies, making it vital for survival.
However, some of these mergers have earned an abundant amount of flak owing to their weak business fundamentals. Many of these startups have not seen a bottomline and don’t recognize the fact that it took companies like Amazon years to reach where they are no, which is still not a very healthy state or one that can be called enviable in any respect.
Here is the list of M&A that took place in year 2019:-
1Killer Jeans maker Kewal Kiran Clothing acquired Desi Belle
Killer Jeans maker Kewal Kiran Clothing Limited acquired women’s brand Desi Belle. The apparel retailer will focus on Tier II and III cities and increase the number of distributors across India from 125 to 200. It also plans to launch a new brand, Immortal, to gain market share in the low- priced segment.
Kewal Kiran earlier, followed a conservative approach, selling garments to wholesalers and distributors through an outright purchase agreement. Though this strategy helped in building a strong balance sheet with better cash flows, it did not provide access to key northern markets. The company will now offer garments to traders in North India with a commitment to take back 20 to 30 percent of the goods if not sold.
The brand is confident of achieving Rs 200 to Rs 250 cr revenues from Desi Belle brand in the next five years.
2Advent International acquired Enamor
Advent International, one of the largest and most experienced global private equity investors, announced that it has acquired a 100 percent stake in Enamor, a leading women’s premium innerwear brand in India, from India Alternatives, Faering Capital and the promoters for a combined equity value of approximately Rs 320 crore.
The transaction is Advent’s eighth investment in India in the past four years and its fourth in the consumer goods sector during the same period.
Founded in 2001 as a joint venture with Barbara of France, Enamor offers a high quality range of lingerie, sportswear and athleisure wear. The company has 20 exclusive brand outlets and over 4,500 points of sale nationwide, predominantly located in larger cities, as well as a strong online presence and e-commerce business.
“Enamor is a market leader in a dynamic segment with significant growth potential and a strong management team who will continue to lead the business,” said Vinod Padikkal, a Director at Advent International. “We are excited to work with the team to help take the brand to the next level.”
Shekhar Tewari, CEO of Enamor, added: “Women’s lingerie in India is a high-growth market, with only a few strong brands in operation. As lingerie sales increase alongside disposable income, Enamor, one of the market’s leading players, is strongly positioned to benefit from these trends. We look forward to working with a global investor such as Advent, who will bring significant expertise and resources to help grow our business faster.”
3Aditya Birla Fashion and Retail acquired Jaypore
Aditya Birla Fashion and Retail Limited began a new chapter in its growth story with 100 percent acquisition of ‘Jaypore’; an Indian online and offline retailer, that offers curated collections of handmade, handwoven and handcrafted apparel, jewellery, home textiles and accents, based on craft forms, from all over India.
Commenting on the deal, Ashish Dikshit, Managing Director, ABFRL said: “Ethnic wear is the largest segment in the Indian fashion apparel market. While ABFRL has built a diversified portfolio of brands across different segments, ethnic wear space is currently under-represented in our bouquet of offerings to consumers. The proposed acquisition is, therefore, a great strategic addition to our portfolio and gives us a strong footing in a segment that is growing in double digits. Jaypore is a brand with strong equity and with a differentiated offering of products based on Indian crafts. It provides a great platform for us to build a strong presence in the Ethnic segment and in accessories and home segment. This acquisition will further strengthen leadership position of ABFRL in the branded fashion space.”
Apart from this, Aditya Birla Fashion and Retail has also acquired TG Apparel & Decor Pvt Ltd.
4Rent It Bae acquired Flyrobe
Delhi based startup AARK World Pvt. Ltd that owns and operates Rent It Bae (premium fashion rental service) has acquired the business of Flyrobe, India’s first fashion rental startup. The company has merged the two businesses and is now operating under the brand name Flyrobe.
The deal between the two is a part-cash and part-stock. The new combined business is now valued at Rs 60 crore. The deal is aimed at accelerating growth and expansion. The company plans to expand its footprint in India and overseas to Dubai, London and the US through a franchise model.
To support this acquisition, AARK World Pvt. Ltd. raised an investment round from its existing investor GEMS Partners, a micro VC fund based in Delhi and is poised to go for a larger Series A. Flyrobe’s previous investor STRIVE (formerly known as GREE Ventures) also remains invested in the new company.
Announcing the acquisition, Aanchal Saini, formerly Co-founder & CEO Rent It Bae and now CEO, Flyrobe said, “We are the first in India offering a wide range of ethnic wear on rent. The aim is to expand our footprints to National as well as International markets alongside exploring new business propositions. With our ongoing growth, we are slated to hit the Rs 100 crore mark in the next two years.”
“We are also launching virtual walls at all Flyrobe stores. Within months the trial feature as Augmented Reality will be available on the mobile app. This virtual experience is called ‘Tryrobe’. We believe that this first of its kind differentiator will be a major boost for our online business,” she added.
The company plans to incorporate an Omnichannel strategy to grow the business as consumer demand for a multichannel shopping experience continues to mount.