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Mumbai: Advent International, the leading US-based private equity investor, has acquired Dixcy Textiles Pvt. Ltd, the South Indian firm which sells leading innerwear brand Dixcy Scott. Dixcy’s founder and managing director Prem Prakash Sikka will retain a stake in the company and continue as the chairman following the completion of the transaction, said a company statement. Financial terms and other details were not disclosed.

The transaction is Advent’s fourth investment in India since 2015 following its purchase of equity stakes in Crompton Greaves Consumer Electricals, QuEST Global Services and ASK Group. Avendus Capital was the financial advisor to the promoters of Dixcy.

Private equity fund Advent International is in talks to buy a stake in underwear brand Dixcy Scott, and Avendus Capital Pvt. Ltd has been hired by Dixcy to find an investor, Mint reported in April. Dixcy plans to raise money from private equity funds at a valuation of Rs3,000-3,400 crore, according to the Mint report.

Founded in 1982, Tirupur-based Dixcy is the exclusive manufacturer and marketer of several leading innerwear brands, including Dixcy Scott, Dixcy Scott UNO, Dixcy Josh and Dixcy & Slimz. The company also sells a premium range of products including casual wear such as track pants, shorts and polo t-shirts. Additionally, Dixcy has begun to expand internationally by placing its products in stores across the Middle East and Singapore, stated the company release. The company employs over 3,500 people and generated sales of Rs780 crore ($120 million) in fiscal year 2017.

“We look forward to working with Advent to further expand the business, following a twin-pronged strategy involving organic growth from the existing offerings and expanding internationally to newer geographies," said Raghul Sikka, director of Dixcy.

“The innerwear market in India is expected to grow at double-digit rates over the next five years, driven by increased per capita spending and consumer demand for higher quality products," said Shweta Jalan, managing director and head of India for Advent International. We see significant opportunities to create value by investing in distribution, sales and product innovation, and improving procurement and production efficiency, Jalan added.

Dixcy Scott, endorsed by Bollywood star Salman Khan, competes with Page Industries Ltd, the licensee for the Jockey brand in India; Rupa and Co. Ltd, the owner of MacroMan, Frontline and Euro brands; Lux Industries Ltd, the owner of the Lux Cozi brand; and Dollar Industries Ltd, which sells brands such as Bigboss and Club in India.

The Indian underwear market is currently estimated at Rs24,000 crore and the segment has grown at 15% over 2010-15, according to a 2016 report by Intimate Apparel Association of India and Wazir Advisors. The underwear market is estimated to continue at the same growth rate over the next five years and is expected to become a Rs47,000 crore market, which is nearly 8% of the total estimated apparel market, by 2020, said the report.

The men’s underwear market is currently valued at around Rs8,500 crore. With increasing disposable income and changing consumer attitudes towards the category, the segment is expected to maintain growth to reach Rs16,500 crore by 2020, added the report.

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