Kewal Kiran acquires significant stake of a women denim brand

Kewal Kiran Clothing (KKCL) has acquired 50% stake in Kraus Casuals Private Limited (KCPL).

  • KCPL operates the brand ‘KRAUS jeans’. It is in the business of manufacturing, selling, designing and exporting women’s clothing primarily in women, teen and kids casual and denim bottom and top wear.
  • The brand has a presence in 1,000+ large format stores including Lifestyle, Pantaloons, Reliance, Shoppers Stop, Lulu etc. and network of 8 Exclusive Brand Outlets (EBOs)
  • 50% stake has been acquired at a total consideration of Rs 166.51 cr. It includes both primary and secondary purchase.

Transaction is targeted towards strengthening KKCL’s positioning in the women apparel category.

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Nitin Jain
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Nitin Jain
8 months ago

Some other key points to note

  • The existing promoters of KCPL will continue to run the business and hold the balance 50%. There seems to be something that has been decided for acquisition of this 50% promoter’s stake but Company has declined to discuss about the same.
  • KKCL intends to utilise it’s distribution network (outside large format stores) to grow the Kraus brand.
  • KCPL gets its product manufactured from 3rd parties currently. In future KKCL may decide to manufacture those.
  • Current PBT margins in Kraus business are informed to be similar that of KKCL.
  • Management expects the acquisition to be shareholder value accretive
  • Company has also taken the external consultant’s approval to consolidate KCPL with KKCL reported numbers, despite the latter’s only 50% stake acquisition.
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