Arvind Dham-led Amtek Auto Ltd, backed by investors like Warburg Pincus and ChrysCapital, has struck a deal to acquire business interests of Germany’s Neumayer Tekfor Group for an undisclosed amount. The acquired business has annual revenues of around €500 million ($650 million or Rs 3,500 crore), as per a BSE filing.
Although the firm did not disclose a deal amount, two years ago Motherson Sumi had acquired majority stake in another large German auto component firm Peguform, in a deal which valued it around 2.8x its trailing EBITDA margins.
Assuming similar margin for Neumayer Tekfor, the deal could be valued in the region of $87 million (Rs 475 crore), as per VCCircle estimates. The Economic Times, which first reported the deal, pegged the deal value as much as $500 million, citing sources.
Amtek Auto, which holds majority stake in another listed firm Amtek India, had consolidated revenues of Rs 7,622 crore for the year ended June 2012. The deal with Neumayer Tekfor may push it ahead of Sundaram Clayton as the second largest Indian auto component firm by revenues. Motherson Sumi, which acquired Peguform in 2011, bringing in a business with annual revenues of $1.7 billion, remains the largest auto component maker.
The transaction to buy assets of Neumayer Tekfor is subject to fulfilment of certain conditions which are expected to be completed by end of May this year.
Neumayer Tekfor Group is engaged in the business of forging and integrated machining, having nine manufacturing units across Germany, Italy, USA, Mexico, and Brazil.
Founded in 1985, Gurgaon-based Amtek Auto manufacturers automotive components and assemblies, iron, gravity and aluminum castings, forgings, complex machining, ring gears and flywheel assembly. In January this year, the firm had sold its five per cent stake in Gurgaon-based Amtek Crankshaft India Ltd for $4.17 million and another five per cent stake in Amtek Ring Gears Ltd for $3.80 million to an unknown foreign investor.
Amtel has an existign relationship with Neumayer Tekfor. The firm formed a 50:50 joint venture with Neumayer Tekfor GmbH in July 2010 for manufacturing of high precision fractured piston connecting rod assemblies and modules in India. Under that joint venture agreement, Tekfor could use its global presence for marketing the company's connecting rods in Europe and the Americas.
The Amtek Auto Group is an integrated component manufacturer with 43 manufacturing facilities located in India (39) and Europe (4).
A couple of years ago, the promoters led by Arvind Dham had consolidated their holding by selling their stake in Amtek India to listed flagship Amtek Auto and had bought more shares of Amtek Auto.
In mid-day trades, Amtek Auto scrip was quoting at Rs 76 a share, up over seven per cent in a strong Mumbai market on Monday.