Motherson Sumi Systems jumps on acquisition

Motherson Sumi Systems rose 4.06% to Rs 337.40 at 9:28 IST on BSE after the company said it will buy Reydel Automotive Group for $201 million.

Meanwhile, the S&P BSE Sensex was up 31.38 points, or 0.09% to 33,286.74.

On the BSE, 97,000 shares were traded in the counter so far compared with average daily volumes of 2.52 lakh shares in the past two weeks. The stock had hit a high of Rs 340.50 and a low of Rs 332 so far during the day. The stock hit a 52-week high of Rs 395 on 20 December 2017. The stock hit a 52-week low of Rs 246.79 on 3 April 2017.

Motherson Sumi Systems (MSSL), flagship company of the Samvardhana Motherson Group (SMG), through its step-down subsidiary Samvardhana Motherson Automotive Systems Group B.V. (SMRP BV), announced the proposed acquisition of Reydel Automotive Group (Reydel), a privately held portfolio company of Cerberus Capital Management, L.P. (Cerberus) that manufactures interior components and modules for global automotive customers. The purchase price for the transaction is $201 million.

This would be the 21st acquisition from the Samvardhana Motherson Group and is intended to further bolster Motherson's offerings in the automotive interiors space.

Reydel's interiors product portfolio includes instrument panels, door panels, console modules, decorative parts and cockpit modules. Reydel's global presence spans 20 plants and 16 countries, and is supported by a workforce of approximately 5,650 associates. The acquisition would enable both companies to capitalise on new opportunities in their existing and new geographies, as well as within each others' customer portfolios. Reydel's revenue for the year ended 31 December 2017 was $1048 million and EBITDA was $68 million (provisional, and in accordance with US GAAP).

The transaction will be discussed with employee representatives and, subject to obtaining customary regulatory and other approvals, could close within the next four to six months. The consideration is expected to be financed using existing cash and banking limits at SMRP BV.

Motherson Sumi Systems' consolidated net profit rose 2.63% to Rs 561.71 crore on 35.74% increase in net sales to Rs 14271.45 crore in Q3 December 2017 over Q3 December 2016.

Motherson Sumi Systems is one of the world's leading, specialized automotive component manufacturing companies for Original Equipment Manufacturer (OEMs).

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