Matrix sells TCNS to TA for $140m

The New-Delhi based company was sold to Boston-headquartered private equity firm TA Associates.

Matrix Partners India has exited its investment in New Delhi-based ethnic apparel company TCNS Clothing for $140 million.

TCNS Clothing was sold to growth investor TA Associates, which plans to take the company to international markets, the firm said in a statement.

Matrix Partners India, which manages INR 4,500 crores ($670 million; €600 million) of assets, invests in consumer-driven companies in India. The Mumbai-based firm invested around INR 90 crores in TCNS in 2011. During its five-year ownership, Matrix had set up systems and processes for tighter control on inventories and expanded the business to Sri Lanka and Mauritius. The company also achieved consumer sales of more than $120 million in fiscal year 2016, a 70 percent growth compared with the previous year.

The firm is currently investing Matrix Partners India II, its 2011-vintage vehicle that raised $300 million. Among the firm’s other investments in India are maternity chain Cloudnine, local transport app Ola, and doctor search engine Practo.

Investors in the fund include Massachusetts Institute of Technology (MIT) Retirement Plan, University of Michigan and Andrew W Mellon Foundation, according to PEI data.

Naresh Patwari, a director at TA Associates’ Mumbai office, will join the TCNS board of directors following the deal

According to Avendus Capital, financial advisor to TCNS, India’s women apparel market will grow from $13 billion in 2015 to up to $20 billion in 2020. Of $13 billion, more than $2 billion accounts for the branded apparel market, a figure which is expected to double over the next 10 years.

Other private equity firms that have tapped into India’s apparel industry in recent years include General Atlantic, which bought Anita Dongre’s Global Desi; Warburg Pincus, which invested in BIBA Apparels; and Everstone Capital, which acquired a minority stake in fashion house Rita Kumar.