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Motherson Sumi to enter Turkey via two acquisitions

By Narinder Kapur

  • 19 Jan 2021
Motherson Sumi to enter Turkey via two acquisitions
Credit: VCCircle

Automotive parts manufacturer Motherson Sumi Systems Ltd will enter the Turkish market with the acquisition of two companies through a subsidiary.

The Noida-based company in a statement said its subsidiary, Samvardhana Motherson Automotive Systems Group BV, will acquire majority stakes in Plast Met Plastik Metal San. İmalatveTic.A.Ş.(PM-Bursa) and Plast Met Kalıp San.veTic.A.Ş.(PM-Istanbul), collectively known as the Plast Met group.

In a filing with stock exchanges, Motherson Sumi said it will acquire 75% of the two companies, which reported combined revenues of €33.4 million in 2019.

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While the company did not disclose the price at which the acquisition will take place, it said the final purchase amount for the Plast Met companies will be 75% of the equity value determined from a base enterprise value of €21.78 million (around $26.4 million or Rs 193.2 crore).

The acquisition will help Motherson Sumi with its expansion into Turkey, which the company says holds long-term growth potential for it.

Motherson Sumi expects these acquisitions to close within three months, and hopes them to be EPS (earnings per share) accretive.

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“This is the 25th acquisition by Motherson Group,” Motherson Group chairman Vivek Chaand Sehgal said.

This development comes around three months after Motherson Sumi signed a strategic agreement to acquire the electrical wiring interconnection systems business of Bombardier Transportation, the rail equipment division of Bombardier Inc.

Shares of the company ended trading on Tuesday up 1.62% at Rs 159 apiece. The automotive parts manufacturer reported consolidated net sales of Rs 63,537 crore and net profit of Rs 1,294 crore for the 2019-20 financial year.

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