Indian auto-component maker Motherson Sumi Systems Ltd said on Monday it has agreed to acquire the Netherlands-based Reydel Automotive Group for $201 million (Rs 1,307 crore) in cash from US-based alternative investment firm Cerberus Capital Management.
The transaction will consolidate the company’s position as a global supplier of automotive interior products. It will also enhance diversification across customer portfolio and regions, Motherson Sumi said in a statement.
Reydel mainly makes cockpit modules, instrument panels and door panels, consoles and certain other decorative parts. It has 20 manufacturing plants and presence across 16 countries.
The target company’s revenue was $1.05 billion and earnings before interest, taxes, depreciation and amortisation (EBIDTA) was $68 million in the year through December 2017.
Vivek Chaand Sehgal, chairman of Samvardhana Motherson Group, said the combination of complimentary portfolios will create a stronger business.
Motherson Sumi is making the acquisition through its step-down Dutch unit Samvardhana Motherson Automotive Systems Group BV. The deal is subject to signing of the binding documents and obtaining regulatory approvals. The transaction is likely to be closed in four to six months’ time, it said.
Motherson Sumi is the flagship company of the Samvardhana Motherson Group. Japan’s Sumitomo Wiring Systems holds a minority stake in the company. The company has presence in 36 countries across the globe.
The Reydel deal is the company’s 21st acquisition, Motherson Sumi said.
The Indian auto-component group’s most recent acquisition was in January when Samvardhana Motherson International Ltd bought MS Global India Automotive Pvt. Ltd from South Korea’s MS Group.
Motherson Sumi had struck its biggest deal in March 2017 when it acquired a 93.75% stake in Finland’s PKC Group Plc for $610 million.
Cerberus Capital is a private investment firm based in New York. It has about $34 billion under management across private equity, credit and real estate strategies, according to the statement.
Cerberus had acquired the automotive interiors business housed under Reydel from automotive component supplier Visteon Corporation in November 2014.
“Following a successful carve-out from Visteon, we partnered with the business to develop a high-performing and focused management team that was able to vastly improve financial performance,” said Dev Kapadia, senior managing director at Cerberus.
Evercore acted as the exclusive financial adviser to Cerberus and Reydel. Motherson took legal advice from Latham & Watkins. Norton Rose acted as legal adviser to Motherson for anti-trust related matters.