Samvardhana Motherson's Latest Buyout Will Bring It Closer To Carmakers: Chairman
The acquisition gives additional annual revenue visibility of at least 1 billion euros on an average.
The acquisition of a German cockpit module integrator would bring the auto component maker close to the manufacturing facilities of the world's leading automakers, according to Vivek Chaand Sehgal, chairperson of Samvardhana Motherson International Ltd.
"Up until now, we were just a component supplier or the module supplier for the carmaker, but this particular acquisition allows us to work with the automakers very closely," Sehgal told BQ Prime.
SAS Autosystemtechnik, the company acquired from French company Faurecia, has 24 facilities that are located inside various carmakers' manufacturing plants.
The company will assemble the whole thing at the location and supply just-in-time and just-in-sequence, Sehgal said.
Samvardhana Motherson Automotive Systems Group BV, a wholly-owned arm of Samvardhana Motherson International, will acquire the Germany-based company for an enterprise value of 540 million euros or Rs 4,769.35 crore, according to an exchange filing on Sunday.
SAS' clients include major automakers like Volkswagen AG, Skoda Auto Deutschland GmbH, Mercedes-Benz AG, Porsche Automobil Holding SE and Audi AG, along with the leading electric vehicle makers in the U.S. Half of the company's revenues are from the electric vehicle business.
Sales Boost
The company's Chief Financial Officer, Kunal Malani, said the acquisition gives additional annual revenue visibility of at least 1 billion euros on an average, based on the current order book of 3 billion euros for the next three years.
"This business does only interior modules. We do exteriors, commercial vehicles as well. So, there are many things that we can add to the asset," Malani said.
The whole point of the 3.5-billion euro of pass-through, which is counted in the gross revenue, is something the company has a potential of insourcing, he said.
As newer orders come in, that will add to the top line as well as to the bottom line, according to Malani.
Jefferies India said SAS is a decent-sized acquisition and can, prima facie, add 10–15% to Samvardhana International's revenues and Ebitda.
