In a bid to strength its market share in the US market, Sanjay Dalmia's GHCL Ltd has acquired US-based Best Manufacturing Group (BMG) for $ 35 million through its international subsidiary GHCL Inc. The acquisition cost is being funded by existing lenders of Dan River, a company it acquired earlier, and not through current cash flows of GHCL Ltd.
BMG, with annual turnover of $160 million is the leading manufacturer and distributors of home textiles and certain related items for the hospitality and healthcare sector In the US.
After consolidating in upstream textile business, GHCL is likely to make a major acquisition in the textile retail business, sources close to the company said. The deal size is expected to be more than $100 million. The company has already started discussion with some of the potential companies and expects to close the deal in the first quarter of next fiscal.
"The BMG acquisition proves GHCL's growing acceptability of the strategy being put in place even in the most competitive home textile marker," company chairman Sanjay Dalmia said.“We will continue to strengthen our position in the US market including retail," he added.
BMG, a Chapter 11 (bankruptcy-hit) company in the US, is headquartered in Jersey City, New Jersey with satellite operations strategically located in Canada, Mexico and Asia. The company has two manufacturing plants, one each in Combodia and Mexico, along with eight warehouses across USA.
With the acquisition of BMG, the current revenues of Dan River will go from $250 million (including the earlier HW Baker acquisition) to $ 400 million. Dan River, before this acquisition, owned and operated a warehousing network of 1.25 million sq. ft, in-house designing capability and also has an over 200 strong multi-sourcing team in place and has its own brands and branding capabilities.