Motherson Sumi Systems Ltd (MSSL), the country's largest auto component maker and the flagship company of the Samvardhana Motherson Group (SMG), is acquiring 80 per cent stake in Germany-based Peguform Group for an undisclosed amount from Cross Industries AG in what is being pegged as one of the biggest ever overseas deals in the auto ancillary space.
The acquisition will be made through a joint venture in which Motherson Sumi will have 51 per cent share while Samvardhana Motherson Finance Ltd will hold 49 per cent share. This special purpose vehicle (SPV) will acquire 80 per cent stake in the Peguform Group while the remaining 20 per cent stake will be held by the existing shareholder Cross Industries AG. Also, the acquisition will include 50 per cent holding in Wethje Carbon Composite, a part of Cross Industries. o3 Capital was the advisor on the transaction.
Peguform’s 2010 sales were €1.37 billion ($1.72 billion or Rs 8,625 crore) and a reported EBIDTA of €66.87 million ($93.5 million or Rs 421 crore). This transaction will strengthen Motherson Sumi’s position as India’s largest auto component company in terms of revenues. It has reported 21 per cent increase in revenues to Rs 8, 371 crore, with profit after tax rising to Rs 391 crore for FY11. Motherson Sumi had a debt of Rs 1,263.5 crore in FY11, with a net debt-to-equity ratio of 0.6.
The share price of Motherson Sumi was down 3.51 per cent at the close of market on Wednesday at Rs 230.95.
Established in 1959 as Badische Plastikwerke, Peguform is a service supplier of interior and exterior products for the automotive and related industries. It is a global supplier, involved in development, manufacturing and distribution of bumper systems, plastic components for vehicle exteriors, vehicle cockpits, dashboards and vehicle interior trims.
The company is the second largest supplier of door panels and the third biggest supplier of instrument panels in Germany. Also, Peguform is one of the market leaders for bumper systems in Germany and holds a key position for cockpit assemblies in Spain. The company has a notable presence in Europe, supplying to premium German brands like Volkswagen Group, BMW, Porsche, Daimler and others like PSA Peugeot Citron, Renault-Nissan and GM.
Motherson Sumi has been in the field of plastic molding, assemblies and module integration for more than a decade. On the other hand, the product range of Peguform has strong synergies with the existing product range of the SMG in terms of plastic injection molding, door panels, instrument panels and bumpers. This acquisition will provide new technologies and depth to the polymer product range of the group.
“Apart from the synergies that SMG would bring to the acquired entity, the product range of Peguform complements our polymer products in India. There are obvious synergies in terms of customers served, which will further strengthen the position of the group as a global module supplier to automotive OEMs,” said V.C. Sehgal, chairman of Samvardhana Motherson Group and vice-chairman of Motherson Sumi Systems Ltd.
Motherson Sumi Group had acquired the world’s largest automotive rear view mirror maker Visiocorp in a stock-cum-cash deal. The firm has acquired all the subsidiaries of the UK-based Visiocorp for around €25 million ($31.63 million or Rs 163 crore).