Motherson Sumi Open to Buying More Firms Abroad

Motherson Sumi Systems Ltd. is open to buying more companies abroad to expand its business, including into the higher-margin aerospace-parts business, the Indian auto-parts maker's chief executive said.

Motherson Sumi said March 6 it had completed the purchase of the rearview-mirror business of U.K.-based Visiocorp PLC for about €25 million ($32.5 million), jointly with group company Samvardhana Motherson Finance Ltd.
"Visiocorp is a good stepping platform for us for future acquisitions," Laksh Vaaman Sehgal told Dow Jones Newswires late Friday.

Indian auto-parts makers such as Motherson Sumi, Bharat Forge Ltd. and Amtek Auto Ltd. are acquiring overseas companies to gain new technology, enter new markets and boost sales.
The acquisition of Visiocorp includes "product rights worldwide" and global ownership of patents and assets, Mr. Sehgal said.

"So, that (the acquisition) allows us to grow and develop ourselves as a global tier-1 player for the automotive industry and with the freedom to grow in any country or geography."
Motherson Sumi, the flagship company of the Motherson Group, has more than 90 plants and offices worldwide. It is 27.3% owned by Sumitomo Wiring Systems Ltd., a unit of Japan's Sumitomo Electric Industries Ltd.

Japanese trading and investment company Sojitz Corp. holds another 9.6% in Motherson Sumi, which counts BMW AG, Daimler AG, Ford Motor Co. and Maruti Suzuki India Ltd. among its customers.

Mr. Sehgal said the company is keen to enter the aerospace component manufacturing business. "We are an automotive-focussed group, but if there are any other opportunities and synergies through aerospace, we are more than willing to look at that."
Companies such as Amtek Auto have said they plan to diversify into the aerospace business to reduce the risk of focussing on one sector.

"In 2005 we set a target that Motherson Sumi will be a $1 billion company by (March) 2010 and now, with this acquisition, we have already done that" in the current financial year ending March 31 2009, Mr. Seghal said.

The company's total revenue is now between $1.5 billion and $1.7 billion on a projected annualized basis, he added. The effects of the rearview-mirror business will reflect from March, though the full impact will come two years later after the integration of the business, he said.
Exports contribute about 40% of revenue currently, Sehgal said, but he declined to give an outlook for the next financial year ending March.

"It is a difficult time in the European and American markets .. I don't see a huge rise in export numbers," he said. "But, there is an opportunity to get into new (Indian) models which are going to be exported worldwide."

Blue River buys 10.22% in Rane Holdings

Private equity firm Blue River Capital has acquired 10.22 per cent stake in Rane Holdings (RHL), the holding company of Chennai-based auto component manufacturer, Rane Group. The acquisition has been transacted through the secondary market via Blue River’s Mauritius-based investment company.

Rane Group Chairman L Ganesh said, “We believe the investment will enhance the shareholders’ value in Rane companies.”

A representative of Blue River, which has $140 million under management in the country, will now join the Rane Group’s board of directors. The Rs 1,400-crore company is currently undertaking a restructuring exercise to consolidate its shareholdings across group companies through the holding company RHL, which is likely to emerge as the group’s vehicle for mopping up capital for upcoming ventures. Ernst & Young is serving as advisor on the proposed restructuring scheme.

(Source: Business Standard"

Mahindra auto parts arm on buying spree

Mahindra Systems and Automotive Technologies (MSAT), the auto components arm of Mahindra and Mahindra (M&M), is on an acquisition spree.

MSAT is in an advanced stage of negotiations for acquisition of at least four overseas companies in the areas it operates – stamping, composites, forging and gear box. The total acquisition cost may be around Rs 1,000 crore.

Sources close to the development said the acquisitions would help MSAT to register sales of $1 billion, way ahead of its target of achieving this level by 2010. The company last year registered sales of $800 million.

(Source: Business Standard)

Amtek lines up $125 m for buying US component firms

Amtek Auto Ltd said it has lined up around $125 million primarily to acquire US auto component companies in the "coming three to six months". This comes in the wake of its series of acquisitions, the most recent being the UK-based JL French's (Witham) Ltd this week.

Apart from this, in the past few years it has taken over Aluminium Foundaries UK, Zielter, a turbo charger manufacturing company in Europe, GWK in the UK and Smith Jones in the US.

The company is in talks to buy US component companies to augment its forging and machining capacity. Till date, the company has 90 per cent of oversees revenues from the European market and is now gearing up to expand its presence in the US automobile market, one-third of the global market.

"We are expecting many more deals in the coming months. We are looking to buy companies in the US in the range of $50-500 million depending on our business requirements," said Mr Santosh Singhi, Director, Finance, Amtek Auto Ltd.

At present, the company has presence in the ring gear segment in the US with over 50 per cent of the US market share and 35 per cent of the global market, said Mr Singhi.

In the domestic market, Amtek Auto would be investing about Rs 100 crore in capacity expansion and new facilities in Pune, Dharuhera, Baddi and Bhiwadi over the coming three months. It is also increasing its forging capacity to 2,80,000 tonnes from 100,000 tonnes, machining capacity to 30 million from 15 million and casting capacity to 175 tonnes from 75 tonnes over the coming six months.

The Rs 1,100-crore Amtek Auto Ltd is part of the Rs 4,000-crore Amtek Group. At present, Rs 2,000 crore revenue of the Group is accrued from the overseas market, while the remaining comes from its domestic operations, including exports worth Rs 500 crore.

(Source: Hindu Business Line)

Amtek Auto buys J.L. French assets

Vehicle parts maker Amtek Auto Ltd said on Tuesday that it had acquired the assets of UK-based J.L. French (Witham) Ltd. The unit is capable of generating revenue of $120 million, Amtek said in a statement.

(Source: Blonnet.com)

Amtek Auto close to $40 mn deal

Auto parts maker Amtek Auto Ltd is close to buying an aluminium foundry in the UK from J L French Automotive Castings for an enterprise value of about $40 million. (From ET)