Spykar's Acquisition: Riverside, European retailers eyeing deal

Global buyout fund Riverside and three

European fashion retailers are competing with each-other to get hold of India’s biggest home-grown denim brand Spykar Lifestyles after Avigo Capital, which controls about 60 per cent stake in the company announced its plans to sell the business. According to industry sources, Lincoln International is advising the seller on the deal with an expected enterprise valuation of almost $100 million (Rs 554 crores). Spykar’s founder Prasad Pabrekar holds the remaining 40 per cent stake and does not have any immediate plans to exit the business.

Once the deal gets through, the acquirer would get access to Spykar’s strong distribution network and sourcing setup. The brand with 1,350 point of sales, including 250 stand-alone stores reported store sales of Rs 325 crores last fiscal in an $800-million (Rs 4436 crores) Indian denim market.

While Avigo Capital declined to comment on the development. Sanjay Vakharia, Director at Spykar confirmed that Avigo is looking to exit the company and has appointed Lincoln to help find a buyer. Whoever signs the dotted line, would get a ready platform in Spykar, which has a strong distribution network and sourcing setup. The brand has 1,350 point of sales including 250 EBOS and reported store sales of Rs 325 crores last fiscal.

Riverside is a mid-market buyout private equity firm and is yet to acquire any business in India. Avigo grabbed controlling stake in Spykar five years ago after it failed to perform following the 2008 economic crisis. Later by shutting down unviable stores and other capital tightening measures, the company bounced back by dealing with the debt pressure, bringing it down from Rs 156 crores to Rs 66 crores.