SP Apparels Ltd. (SPAL) has inked an agreement to acquire 100 percent stake in Young Brand Apparel and also a garment unit in Palladam and land parcels and buildings from Bannari Amman Spinning Mills.

SPAL was in talks with Bannari Amman for the last few weeks to acquire these assets valued at Rs 223 crore.

The clothing producer will purchase a 51.33 percent stake in Young Brand Apparel from Bannari Amman and also an additional 49 percent stake from other partners of Young Brand Apparel.

SPAL will finance this deal with a well-balanced mix of borrowed funds and internal accruals.

“Through this acquisition, SPAL will be able to further broaden its target markets and customer base while using each other’s capabilities to diversify its product offerings,” a press release said.

The press release added that the new production capacity from the land parcel is expected to support SPAL’s future growth.

“Young Brand Apparel is a strategically important acquisition which is in line with our vision to diversify into other textile and apparel categories. This will further strengthen our export basket, and market presence, and build a more broad-based business model,” P Sundararajan, CMD at SP Apparels said.

“The acquisition will not only strengthen our export spread but also lay a strong foundation for sustainable and resilient business growth,” P Sundararajan observed.

Young Brand Apparel manufactures and exports intimate wear for global brands like American Eagle, Jockey International, Marks & Spencer and Benetton and was set up in 2006.