Image Source: CEO Insights Magazine
Lumax Auto Technologies Ltd. (LATL) has sanctioned the acquisition of IAC International Automotive India (IAC India) remaining stake in business worth ₹2.21 billion. The acquisition is a strategic milestone that distinguishes Lumax's growth and expansion in the automobile components industry, setting the company up for accelerated growth and integration in the Indian automotive sector.
Lumax Auto Technologies, one of the top Tier-1 automotive systems and components supplier companies, has completed the acquisition of the remaining stake in IAC India, gaining full control over the firm. The deal, valuing IAC India at ₹2.21 billion, is poised to enhance Lumax's strength in automotive interiors and plastics, diversifying its product range and market presence.
Acquisition Details
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Lumax Auto Technologies has sanctioned the acquisition of the balance stake in IAC India at an equity value of ₹2.21 billion.
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The firm had earlier picked up 75% stake in IAC India, and the recent action is part of its efforts to achieve complete ownership.
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The deal is planned to be financed with a combination of debt and internal accruals, and robust free cash flows will ensure debt servicing in due time.
About IAC India
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IAC India is a leading Tier-1 interior systems and component supplier to top Indian automotive OEMs such as Mahindra & Mahindra, Maruti Suzuki, Volkswagen India, and Volvo Eicher Commercial Vehicles.
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It has five manufacturing facilities in Pune, Manesar, Nashik, and Bangalore, and has a state-of-the-art engineering facility in Pune with 150 engineers and designers.
Strategic Rationale
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The acquisition is part of Lumax's long-term growth plan, using synergies in automotive lighting, plastics, and interiors to provide one-stop-shop solutions to customers.
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The alliance should enable Lumax to increase its product portfolio, go up the value chain, and increase its kit value per vehicle.
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The two companies will operate as strategic partners to move business ahead, leveraging synergies in products, customers, technology, and manufacturing excellence.
Financial Impact and Market Response
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The transaction is anticipated to be value-accretive, with Lumax targeting consolidated revenues of ₹3,500 crore and a 13% EBITDA margin in FY25.
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Lumax Auto Technologies' stock appreciated following the announcement, an indication of investor optimism regarding the strategic development.
Leadership Commentary
Deepak Jain, Lumax Chairman, has termed the acquisition a "marquee milestone" in the growth journey of the company and an example of its efforts towards strategic association with international industry leaders.
David Prystash, IAC Group CEO, was confident that the alliance would drive IAC India's business forward and provide quality solutions to customers.
Anmol Jain, Lumax Managing Director, highlighted the scope to increase footprint in four-wheeler auto plastics and provide industry-leading solutions.
Relevant Sources: Financial Express, Lumax, CNBC TV18, Moneycontrol, Times of India
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