Auto-component supplier JBM Group said on Monday it has acquired a majority stake in Germany’s Linde-Wiemann GmbH KG as part of efforts to boost its engineering capability and expand its global footprint.
JBM joins a bunch of Indian auto-component makers in making overseas purchases to acquire technological know-how and diversify their business. Motherson Sumi Systems Ltd, Precision Camshafts Ltd and Minda Industries are among the other auto-parts makers that have snapped up assets in Europe over the past year.
JBM said in a statement it is the biggest business transaction in its history, but it didn’t disclose the deal value. It also didn’t specify the exact size of the stake it acquired. ICICI Bank financed the entire transaction.
Linde-Wiemann has annual revenue of $700 million (Rs 5,000 crore at current exchange rates), and the acquisition will increase JBM Group’s total revenue to $2.2 billion, the Indian company said.
Shares of JBM Auto Ltd, the group’s publicly listed arm, jumped 3.5% to Rs 272.30 apiece on the BSE, outperforming the benchmark Sensex’s 0.95% gain. JBM Auto posted net sales of Rs 788 crore for 2017-18, up from Rs 697 crore the year before. However, its net profit declined to Rs 32 crore from Rs 40 crore.
JBM said it will get new products, global customers and new German technologies through the transaction.
The deal is “perfectly in sync” with JBM’s existing scope of operations, executive director Nishant Arya said. Arya will take over as chairman at Linde-Wiemann.
JBM makes auto systems and safety-critical items such as chassis and suspension systems, exhaust systems, air tanks and fuel tanks for cars, two-wheelers, commercial vehicles, and farm and construction equipment.
“JBM and Linde-Wiemann will together focus on developing new products that contribute towards improving the safety and performance of vehicles through light-weighting, thereby increasing the product quality and minimizing the time to market for original equipment manufacturers,” Arya said.
Linde-Wiemann has 17 factories across eight countries, including Germany, the US and China, with more than 2,300 employee. It counts global automakers such as BMW, Volkswagen, Audi and Ford among its clients.
Ulrich Schoof, CEO at Linde-Wiemann said the German company will “extend its holistic system understanding” in the field of e-mobility through an exchange with JBM’s electrical bus division.
Auto component deals
The auto-parts sector has recorded a spate of acquisition and private equity deals over the past year. Motherson Sumi Systems Ltd has been the most prolific buyer, snapping up nearly two dozen companies in India and overseas. Last year, for instance, it agreed to acquire the Netherlands-based Reydel Automotive Group for $201 million.
Also last year, Precision Camshafts acquired a 51% stake in Dutch electric driveline maker Emoss Mobile Systems BV while Minda Industries bought Germany’s iSYS RTS GmbH, a hardware and software developer for automakers.
PE deals in the sector involved the likes of Blackstone and Kedaara Capital. Blackstone acquired Chennai-based Comstar Automotive Technologies Pvt. Ltd and Gurugram-based Sona BLW Precision Forgings Ltd last year.
Homegrown PE firm Kedaara Capital bought the entire business of Sunbeam Auto Pvt. Ltd in a deal that ranked among the top five private equity buyouts in the auto-component segment. Kedaara was also involved in another big-ticket deal two years ago when it sold its stake in Bill Forge to a joint venture between India’s Mahindra group and Spain’s CIE Automotive.
PE firm Oman India Joint Investment Fund, a joint venture of Oman’s State General Reserve Fund and State Bank of India, invested in Pune-based automobile component maker Divgi TorqTransfer Systems last year.