Rajesh Exports On Global Prowl

(Via Times News Network) Vivek Sinha writes:

In what would mark the first big-ticket global acquisition in the retail space, jewellery manufacturer Rajesh Exports is in an advanced stage of negotiations to acquire a string of jewellery retail stores abroad for $100-200 million. The company is working on a complex deal where it is going to acquire a mid-size jewellery chain in the US apart from snapping standalone local jewellers in about 15 countries across North America, Europe, Asia and Australia.

According to sources, the US jewellery chain, with which Rajesh Exports is in talks, has about 80-100 stores spread across the country and the deal is expected to be valued at around $50-100 million. This would include its in-house jewellery brands. Rajesh Exports is looking to acquire a majority stake in this chain.

When contacted, Rajesh Exports chairman Rajesh Mehta declined to comment. However, sources informed ET that Mr Mehta is flying off to the US this week to deliberate on the transaction. This deal is expected to be closed within the next 4-6 weeks. The acquisition of the US-based chain by Rajesh Exports is part of a gameplan of becoming a large global retailer of jewellery.

Other countries where negotiations are currently on include the UK, Canada, France, Germany, Switzerland, Thailand, Malaysia, Australia, Singapore, the UAE, Kuwait, Oman and New Zealand. The company would acquire a handful of jewellery retail outlets in each of these countries spread across 35 cities totalling about 50-60 stores.

This strategy is similar to the company’s ongoing retail expansion in India where one of its retail brands — Shubh — is modelled on similar lines by bringing local jewellers in different cities under its umbrella. All the international retail outlets would be under its wholly-owned retailing subsidiary — 24K Retail.

Sources say that the acquisition will be financed through a mix of debt and equity. The company has already announced that it is planning to raise about $150 million from overseas investors, which will part-fund the acquisitions.

The acquisitions would make Rajesh Exports the first Indian retailer with a global spread of outlets. In terms of the number of stores, GHCL may still rank as the largest Indian retailer internationally. The company had last year acquired UK’s home textile retailer Rosebys which has more than 300 stores in the UK.

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