Samvardhana Motherson Intl to acquire Lumen Gr, Deltacarb SA for Rs 575 cr

Auto components major Samvardhana Motherson International Ltd on Friday announced acquisitions of Australia’s Lumen Group and Deltacarb SA of Switzerland for nearly Rs 575 crore.

The company’s board approved the two acquisitions of the Lumen Group and Deltacarb SA by its wholly-owned arm Samvardhana Motherson Automotive Systems Group BV, Samvardhana Motherson International Ltd (SAMIL) said in separate regulatory filings.

Lumen Group comprises Lumen Australia Pty Ltd, Lumen International Holdings Pty Ltd (which further holds 100 per cent in Lumen North America, Lumen Thailand, Lumen Europe and 90 per cent in Lumen South Africa), Lumen Engineering Solutions Pty Ltd and Lumen Special Conversions Pty Ltd, it said.

However, it will not include Lumen South Africa and merger control approvals are required from the authorities in South Africa, the company said.

The acquisition of Lumen group is expected to be closed by the fopurth quarter of FY2023-24 subject to satisfactory completion of all conditions precedent, SAMIL added.

The group is engaged in the design, manufacture and supply of OEM-certified automotive parts, accessories and dealer-fit products.

On the cost of acquisition, SAMIL said it is being carried out “an enterprise value of AUD 93 million (nearly Rs 520 crore) equity value to be derived based on closing accounts adjustments for debt/debt like items and working capital”.

There will be additional potential payouts based on achievement of operational performance in FY24 and FY27, the company said.

Through the acquisition of the Lumen group, SAMIL said it would gain entry into the OEM (Original Equipment Manufacturer) branded genuine accessories segment, which is a highly lucrative segment globally.

Besides, it said the synergy between the product range presents an opportunity for cross-selling and also an opportunity to explore untapped business potential by upselling from its global locations to genuine accessories and dealer-fit segment.

In a separate filing, SAMIL said for Deltacarb SA acquisition the total purchase consideration is for a maximum 4.5 million CHF (Rs 43 crore) with approximately 10 per cent of the purchase consideration to be a deferred payout based on operating performance over next three years.

“In addition, SAMIL will be taking over net debt including lease liabilities (as of December 2022 approximately 1.2 million CHF),” it added.

Deltacarb SA is engaged in engineering, manufacturing and selling of special and standard tungsten carbide based products for various industrial applications such as stamping, wear resistant parts, metal working and mining.

It has one manufacturing facility in Switzerland.

The takeover of Deltacarb will help in the “acquisition of specific technology and knowhow of tungsten carbide with capability to engineer and manufacture precision parts required in a variety of industries for wear resistant applications and metal working”, SAMIL said, adding it is synergistic with its precision metal and modules division.