Aditya Birla Fashion & Retail Ltd (ABFRL) is acquiring a majority stake in TCNS Clothing (TCNS), a women’s branded apparel company, in a transaction worth Rs 1,650 crore.
TCNS will be merged into ABFRL by acquiring the founding promoter’s stake through a share purchase agreement and a conditional public open offer such that the aggregate shareholding of ABFRL upon completion is 51 per cent.
TCNS Clothing owns ethnic brands such as W, Aurelia, Wishful, Folksong, and Elleven.
The value of the promoter stake and open offer consideration for TCNS is around Rs 1,650 crore for the 51 per cent stake, making it one of the largest deals in the Indian fashion space.
As part of the transaction, ABFRL will make a conditional open offer to acquire up to a 29 per cent stake at Rs 503 per share from public shareholders and acquire the remaining stake from the founder promoters to reach an overall shareholding of 51 per cent in TCNS.
Following this, TCNS will be amalgamated with ABFRL under the merger scheme wherein public shareholders of the former will receive 11 shares of ABFRL for every six shares that they hold in TCNS.
The transaction is subject to customary regulatory approvals including approvals from the Competition Commission of India, Sebi, stock exchanges, and the National Company Law Tribunal.
Shares of TCNS ended at Rs 520.80 on Friday. The open offer price thus comes at a slight premium of nearly 2 per cent.
TCNS Clothing had a turnover of Rs 933.03 crore during the quarter ended December 31, 2022 and its net profit stood at nearly Rs 11 crore in the period.
ABRL said the acquisition is in line with its objective of building a comprehensive fashion portfolio across consumer segments and price points.
Aditya Birla Group chairman Kumar Mangalam Birla said for ABFRL, the TCNS deal is indeed a significant milestone as it complements its existing portfolio of exceptional brands across the entire spectrum of Indian fashion.
“By embracing TCNS’s portfolio of loved women’s ethnic brands, we are reinforcing our commitment to ethnic wear, the largest category in the apparel industry. With this acquisition, the fast-growing ABFRL platform is poised for the next phase of transformational growth,” he added.
The companies disclosed that ABFRL will acquire between 22-30 per cent of the company from the promoters, subject to the response in the open offer.
“Over the last 20 years, we have built India’s most successful women’s franchise on the back of our leading brands. The market continues to offer long-term growth opportunities and our partnership with ABFRL will help us fully realise this potential,’’ TCNS managing director Anant Daga said.
ABFRL has a network of 3,468 stores and a presence at 6,515 points of sales in department stores across India, as on March 31, 2022. It has brands such as Louis Philippe, Van Heusen, Allen Solly and Peter England under its belt. The company also owns leading fashion retail chain Pantaloons.
