Arvind (500101) investor relations material

Deal rationale and strategic fit

• Acquisition provides immediate manufacturing presence and entry into the US, the largest market for needle-punch nonwovens and technical textiles, expanding global footprint and reducing supply chain risk amid geopolitical uncertainties.

• Dalco-GFT operates in needle-punched nonwoven technology, aligning with existing capabilities and providing immediate scale in the US market.

• Adds Dalco-GFT as a fourth vertical, complementing existing Human Protection, Industrials, and Composites businesses, and expands into Automotive, Furniture & Furnishing, and Construction sectors.

• Access to a $2.5 billion US addressable market across mobility, geotextiles, industrial, and flooring sectors, with an established customer base and 88% sole-source positions.

• Strengthens customer relationships and resilience, with existing shareholders retaining a 39% stake, reflecting alignment and confidence in future growth.

Financial terms and conditions

• 61% controlling stake acquired at a $136 million valuation, representing 7.75x CY2025 EBITDA, with a defined path to 100% ownership over four years.

• Acquisition financed through ~$50 million non-recourse debt at Dalco-GFT and ~$60 million debt at AAML, optimizing tax benefits in both geographies.

• Dalco-GFT reported ~$100 million revenue, ~17% EBITDA margin, and ~40% ROCE in CY25.

• Transaction is margin and EPS accretive from year one, with plans for rapid deleveraging and financial ratios remaining within covenants.

• Seller retains a significant equity rollover, with full acquisition planned in tranches over two and four years.

Synergies and expected cost savings

• Synergies include technology and process knowledge transfer, cross-selling, and leveraging sales channels between India and the US.

• Opportunity to introduce US products to India and vice versa, enhancing growth in both markets and expanding customer base by 75+ active customers.

• Filtration business adjacency enables expansion into US filtration markets and selective cross-sourcing and supply chain optimization.

• Capacity expansion and value-added mix shift expected to drive 18-20% growth and margin expansion.

• Highly automated operations minimize workforce expansion needs, supporting cost efficiency and reducing technology risk.