The leading gem and jewellery exporter company in the country, Gitanjali Gems Ltd, is all set to acquire one of the top retail chains in the United States for around $100 million (Rs 450 crore).
The retail chain is among the top ten in the US with more than 100 outlets across the country.
The deal is expected to close in the next two weeks, sources said.
Mahul Choksi, the chief executive officer of Gitanjali Gems, refused to comment on the issue. "We are looking for acquisitions in the US but I cannot comment at this point of time," he said.
Gitanjali has raised $110 million recently through foreign currency convertible bonds (FCCB). The company had stated that the fund would be utilised to cater to the company capital expenditure requirements and acquisition. Jefferies International Ltd was lead manager for the transaction.
According to leading investment bankers close to the deal, the acquisition would be the perfect synergy for Gitanjali Gems as well as the US company.
"It would help in increasing the margin as it would directly sell some of the leading brands of Gitanjali like Nakshatra, Asmi and Sangini in the United States," said the source.
The company has already formed a 50:50 joint venture with Sulieman Al Othaim of Saudi Arabia, one of the leading retail chains in West Asia.
Mickey Commar, country head of Jefferies International, said that the acquisition of retail chains would help the Indian company cut costs and increase its earning by 10 to 15 per cent.
"As long as they maintain their quality and style and control the supply chain, they will harness a higher profit margin. The company, like GHCL, which acquired Rose Bye in the UK, would leverage their strong back while retaining their quality," he added.
In the last financial year, Gitanjali reported revenues of Rs 1625 crore, with adjusted net profit of around Rs 48 crore.