Automotive component supplier Mahindra CIE Automotive s (MCIE) board of directors on Tuesday approved the acquisition of Aurangabad Electricals (AEL). The acquisition will be done by acquiring 100% of AEL s equity shares for an enterprise value of Rs 875.6 crore, which includes a future deferred payment estimated up to Rs62.2 crore.
Aurangabad Electricals is a manufacturer of aluminium die-casting products based in Aurangabad. It manufactures body, brake and engine parts and supplies to a number of domestic and global two-wheeler and passenger cars manufacturers, especially Bajaj Auto, constituting 77% of their business, with Bosch, Valeo and Ashok Leyland being the others.
AEL s turnovers during FY16, FY17 and FY18 were Rs565.8 crore, Rs569.3 crore and Rs651 crore, respectively. It reported a profit of Rs34.4 crore in FY18.
MCIE is an automotive components supplier to auto manufacturers in India, Europe and Mexico. While India forms 41% of MCIE s business with Tata Motors, M&M and Maruti being the top customers, Europe constitutes 59% of MCIE s revenues with Daimler, Renault and Volkswagen as major clients.
AEL s acquisition will help MCIE to enter the aluminium die-casting business, strengthen its presence in the two-wheeler segment and diversify its customer base.
For the year ending December 31, 2018, MCIE reported a net profit of Rs35 crore with a revenue of Rs 2,529 crore. Vikas Sinha, senior vice-president, strategy- MCIE said during a post-earnings conference call that the company had a capex of Rs 377.2 crore in CY2018 on a consolidated basis.
The acquisition will be an all-cash deal wherein MCIE will pay through cash on its balance sheet. The acquisition is expected to be completed by April 10, 2019.