Company poised for further growth through Quenby purchase
27th May 2015: Strong on the heels of a solid year of growth and profitability, Sri Lanka's leading Textile Mill, Textured Jersey Lanka PLC (TJL) took yet another step towards longer term growth and customer centric solutions provision. Pursuant to a prior disclosure made, the Board of Directors of Textured Jersey Lanka PLC informed the Stock Exchange on Tuesday, 26th May 2015 that they have decided to proceed with the acquisition of Quenby Lanka Prints (Pvt) Ltd ('Quenby Lanka').
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 US$ 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.
Textured Jersey is Sri Lanka's leading Fabric Mill which 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 US$ 10 million. TJL's 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.
Quenby Lanka, an equal joint venture between Brandix Lanka Limited and Trust Family Industries, Inc., is a leading Fabric Printer in Sri Lanka. Quenby's 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 optimization and margin improvement through synergies.
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 (Pvt) 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.