Auto components major Amtek Auto Ltd has signed a share purchase agreement with the promoters of Jamshedpur-based JMT Auto Ltd to acquire their entire 51.2 per cent stake in the public-listed firm for around Rs 110 crore ($18.4 million), as per a stock market disclosure. JMT Auto is led by Rajeev Singh Dugal.
Amtek Auto has also made an open offer to acquire additional 26 per cent stake in JMT Auto as the deal has triggered a change in the management of the firm and involves stake purchase above the threshold level.
If the open offer is fully successful, Amtek Auto will have to shell out another Rs 55.6 crore to increase its holding. The firm has made the open offer at Rs 149 a share, 28 per cent premium to the last traded price on Thursday. JMT scrip shot up 5 per cent to hit the upper circuit for the day at Rs 121.95 a share on the BSE in a strong Mumbai market on Friday.
Interestingly, both Amtek and JMT are backed by the PE firm ChrysCapital. ChrysCap held as much as 30.48 per cent stake in JMT and was the single largest non-promoter shareholder as of March 31, 2013. The PE firm also holds around 8 per cent of Amtek Auto. Amtek also counts Warburg Pincus as a shareholder.
Based in Gurgaon, Arvind Dham-led Amtek Auto manufactures automotive components & assemblies, iron, gravity and aluminium castings, forgings, complex machining and ring gears and flywheel assemblies.
Earlier this year, it acquired the business interests of Germany’s Neumayer Tekfor Group for an undisclosed amount, which brought in assets churning annual revenues of around €500 million. At the same time, it also sold the majority stake in two smaller subsidiaries – Amtek Crankshafts and Amtek Ring Gears.
A couple of years ago, the firm acquired majority stake in another public-listed group firm called Amtek India. Both Warburg Pincus and ChrysCapital were also investors in Amtek India but exited the firm following a group restructuring when the promoters, led by Dham, sold their stake in Amtek India to Amtek Auto in a consolidation exercise.
Amtek Auto had consolidated revenues of Rs 7,622 crore for the financial year ended June 2012 and is one of the top Indian auto components makers by revenues.
Amtek scrip was trading at Rs 71.95, up 1.20 per cent in mid-day trade on the BSE on Friday.
Set up in 1987, JMT Auto (earlier known as Jamshedpur Metal Treat) manufacturers high-precision gear box, engine and axle components for medium and heavy commercial vehicles. It is a key components supplier to Tata Motors’ Jamshedpur plant while other domestic clients include BEML, Cummins India, Telcon, L&T Komatsu, Caterpillar India, TAFE and Timken India. The company is also exporting to global customers such as Caterpillar, CNH, Cummins, Eaton and General Motors.
(Edited by Sanghamitra Mandal)