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:-
11 Killer Jeans maker Kewal Kiran Clothing acquired Desi Belle
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.
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.”