GIC, which manages more than $100 billion in funds globally, will make the investment through a purchase of new shares and warrants. GIC will route the investment through an affiliate company, Indivest. The deal values 100% of Reid & Taylor (India) on an equity value basis at Rs35.4 billion.
The remaining 74.6% of Reid & Taylor will continue to be owned by its parent S Kumars Nationwide, whose businesses include fabrics, apparel and home textiles as well as fibre categories such as natural, manmade, and blended. For the most recent financial year, the company registered revenues of Rs17.5 billion on which it earned an Ebitda of Rs4 billion.
ôGIC's investment will help Reid & Taylor to grow in the luxury fabric and apparel and other segments of the textile industry, where it is already a market leader," says S Kumars in a National Stock Exchange of India filing related to the investment.
Reid & Taylor is a more than 100-year-old brand that started in Scotland and was known for its niche in premium cashmere menÆs suiting fabrics. It was acquired by S Kumars in 1997 and, in 1998, the Indian company launched a state-of-the-art production plant at Mysore to produce these fabrics.
Soon after the acquisition, S Kumars launched an advertising campaign for Reid & Taylor with Pierce Brosnan, trying to capitalise on the fact that he was playing James Bond at the time. But Indian customers did not identify with Brosnan and the firm had to rethink its India marketing strategy. In 2003 it appointed IndiaÆs iconic movie star Amitabh Bachchan and the brand sales took off. Bachchan continues to be the face of the Reid & Taylor brand.
In November 2007, S Kumars carved out its Reid & Taylor division, which by then comprised both a luxury textiles and ready-to-wear garment business, to a wholly-owned subsidiary, Reid & Taylor (India). At the time S Kumars said the move was intended to enable it to focus on the business and was a precursor to introducing a private equity investor to the business. Ultimately, the firm said it was looking to spin off Reid & Taylor through an initial public offering.
S KumarsÆ shares closed at Rs106.90 each yesterday on the NSE, up marginally on the news. The NSE index, the Nifty, lost around 2% to close at 4,191 points.