“Gokaldas Exports Limited (GEL) through its wholly owned subsidiaries has entered into an agreement to acquire Atraco Group (Atraco), a leading manufacturer of apparel with a strong market position and customer relationships across the US and Europe,” Gokaldas Exports said in an exchange filing.
The equity value of the deal being done through Gokaldas Exports’ subsidiaries is $55 million and will be funded by a mix of debt and internal accruals. The transaction is expected to be closed by Q3 FY24.
Atraco was founded in 1986 and has a strong legacy of over three decades of regional leadership in the apparel business. Headquartered in Dubai, UAE, where it has its marketing, sourcing, product development and corporate functions.
Atraco operates with a network of four manufacturing units in Kenya and one in Ethiopia producing about 40 million garments annually.
“The acquisition of Atraco is an important step in this direction as it is strategically relevant, possesses a good complementary customer base, operationally strong, and above all, a leader in its own sphere. With this acquisition, we will gain access to low-cost duty-free locations for manufacturing,” said Sivaramakrishnan Ganapathi, Vice Chairman and Managing Director of Gokaldas Export.
Atraco Group’s revenue is approximately US$ 107 million with a profit after tax of US$7.2 million for the calendar year 2022. The stock delivered multibagger returns to their investors, as in the last one year Gokaldas Exports surged over 100%, while it has rallied nearly 300% in the past two years. It has also rallied nearly 1,200% in the last three years.
As per Trendlyne data, the average target price of the stock is Rs 598, which shows a downside of 19% from the current market prices. The consensus recommendation from eight analysts for the stock is a ‘Buy’.
Technically, the day RSI (14) is at 76. The RSI below 30 is considered oversold and above 70 is overbought, Trendlyne data showed. MACD is at 15.1, which is above its center and signal Line, this is a bullish indicator.
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