Textured Jersey Lanka Plc (TJL) has firmed up its decision to buy leading fabric printer Quenby for $ 3.5 million, a move which will propel the former’s next phase of growth.
TJL CEO Sriyan de Silva Wijeyeratne stated that he was excited by the move and the synergy it would bring, and added that it presented a clear indication of the company moving aggressively towards its next phase of growth to pursue its vision of being one of the leading Fabric Mills in South Asia.
Sri Lanka’s leading textile mill, TJL described the Quenby Lanka Prints Ltd acquisition as a bold move towards longer term growth and customer centric solutions provision.
TJL at present offers a range of innovative cutting-edge fabric solutions to some of the most demanding customers in the world. Last year, TJL’s profits grew by 16% and exceeded $ 10 million.
In February 2015, TJL initiated the valuation and due diligence study for the potential acquisition and subsequent to discussions between the relevant parties, a purchase price of $ 3.5 million was agreed upon.
Reflecting the strength of a strong balance sheet, the entire consideration is due to be paid out in cash to the shareholders of Quenby Lanka in order to acquire the shares of the company.
The transaction will be concluded upon the completion of all regulatory approvals and formalities.
Quenby Lanka, an equal joint venture between Brandix Lanka Ltd., and Trust Family Industries, Inc., is a leading Fabric Printer in Sri Lanka. Its facility is located on 4.4 acres of land in the Seethawaka Industrial Park, in close proximity to TJL.
“Therefore, in addition to the printing capability enhancement for TJL, the acquisition also offers potential for further capacity optimisation and margin improvement through synergies,” TJL said.
It said as a strategically located vendor, Quenby Lanka has developed a strong working relationship with TJL, and this link sees a natural culmination through the acquisition. The relationship would help speed up the business integration process and launch TJL to the next level of solutions provision and innovation, adding significant long-term value to its shareholders.TJL had also previously intimated their interest in yet another company, Ocean India Ltd, and these discussions are also ongoing.
TJL’s major shareholders are Pacific Textiles from Hong Kong, and the Brandix Group, with the local Public owning 30% of the company.
Courtesy: daily Financial Times 28 May 2015