Pricol To Acquire Plastic Component Division Of TVS Motor Arm For Rs 215 Crore
The debt-free acquisition is being made through an all cash deal, Pricol said as it looks to expand the injection moulding business into a standalone vertical.
Pricol Ltd. on Monday announced the acquisition of injection moulded plastic component business of Sundaram Auto Components Ltd., a subsidiary of TVS Motor Co., for Rs 215 crore.
The acquisition will be completed by Pricol Precision Products Pvt., a wholly-owned arm of the company, on a slump sale basis, according to a regulatory filing.
The company will also invest Rs 120 crore in Pricol Precision Products in one or more tranches to expand business, the filing added.
"With this acquisition, Pricol will see a consolidated topline addition of approximately Rs 730 crore combined with SACL's healthy financial parameters that are value accretive to Pricol," the company said in a statement.
The debt-free acquisition is being made through an all cash deal and is subject to adjustments, if any, as defined in the agreement at the time of closing the deal, it added.
SACL was established in 1992 and has expertise in innovative polymer solutions and cutting-edge injection moulding capabilities. The TVS Motor unit has six state-of-the-art manufacturing facilities across India.
Pricol sees the acquisition as an opportunity to expand its injection moulding business into a standalone vertical, leveraging SACL's strengths and Pricol's capabilities for growth. It also aims to broaden the customer base and product offerings by integrating the synergies of both companies.
"As market dynamics evolve, and we allocate capital more efficiently in accordance with our strategic plans, we are delighted that Pricol, our trusted long-term supplier partner, is taking over the business," said K Gopala Desikan, group chief financial officer of TVS Motor.
"We are confident that they will uphold the same values and ethos, ensuring a smooth transition and continued growth," he added.
Pricol is a manufacturer of automotive components and precision-engineered products.
The company's board also approved to provide corporate guarantee for any loans to be obtained by Pricol Precision Products up to an amount not exceeding Rs 250 crore.
Pricol also noted that it plans to invest up to 26% of equity capital of digital tech arm PQSI Digital Pvt. in more than one tranches.
Shares of Pricol ended 2.44% higher at Rs 495.55 apiece on the NSE, ahead of the announcement, compared to 0.6% advance in the benchmark Nifty 50.
