HIM Group, through its privately held flagship company HIM Teknoforge Ltd and associate firm Globe Precision Industries Pvt Ltd, has entered into a definitive agreement to acquire 55 per cent stake in Vadodara-based Gujarat Automotive Gears Ltd (GAGL) from its promoters for Rs 21.8 crore ($3.6 million).
The group has also made an open offer as part of the deal to acquire another 26 per cent stake in the public-listed firm, as per a stock market disclosure.
GAGL promoters, the Kothari family, are selling 1,92,500 shares for Rs 1,137 each that aggregates to Rs 21.88 crore. The acquirers may have to shell out another Rs 10.3 crore to buy shares from the public shareholders if the open offer is fully successful. The Kothari family currently owns 70.2 per cent in GAGL and will retain 15.2 per cent after the majority stake sale.
GAGL is an auto and tractor components manufacturing company which offers transmission gears, axle shafts, propeller shaft components, king pin units, wheel spanners and tractor components. The firm sells its products under the brand names KAP and KAG in India, Sri Lanka, the US, Europe and Gulf countries.
The company clocked total revenues of Rs 25 crore with a net profit of Rs 4 crore for the year ended March 31, 2013.
Founded in 1981, Chandigarh-based HIM Teknoforge is the flagship company of HIM Group and manufacturers auto parts and components. The firm is led by Vijay Aggarwal and supplies majority of its products to OEMs (original equipment manufacturers) such as Ashok Leyland, Swaraj Mazda, Escorts, Bharat Gears and M&M.
It is backed by India Automotive Components Manufacturers Private Equity Fund –1 Domestic, a fund managed by IFCI Venture Capital Funds Ltd, which invested $2.23 million in the company two years ago for a 26.88 per cent stake.
In the same space PE-backed Amtek Auto struck a deal to acquire a large stake in JMT Auto. Both the firms are baked by ChrysCapital.
In a large cross-border deal in the industry, Mahindra & Mahindra struck a deal to pick a 13.5 per cent stake in Spanish auto parts supplier CIE Automotive in a deal which will see Mahindra’s auto component business being acquired by CIE.
(Edited by Joby Puthuparampil Johnson)