Acquisition of majority stake in IAC India business
Key highlights
- IAC group – More than 3 bn dollar global revenue.
- IAC India – leading tier I manufacturer of instrument panel, door panel, cockpit, headliners, etc
a. Derives 87% of revenue from PV segment; 13% CV
b. Mahindra most prominent customer, followed by VW, Volvo & Maruti Suzuki
c. Has 5 plants in India.
d. Has a state of the art manufacturing plant in Pune with 150+ engineers and designers - Revenue: FY 20: 341 cr | FY 21: 284 cr | FY 22 481 cr | 9M FY 23 470 Cr
600 cr full year revenue on pro rata basis . Strong double-digit growth expected next year. - EBITDA margins at 15% and ROCE of 30%+ ; margin will continue to be in teens
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Acquisition will take place at 587 cr; for 75% stake. 25% stake will remain with IAC.
Acquisition to be funded via mix of internal accruals and debt. Debt to be repaid over next 4-5 years considering strong free cash flows… - Most of customers of LATL are existing customers of IAC. Idea will be to increase wallet share. Strengthens core competency in areas of injection moulding, etc
- Deal is not closed yet; mgmt. likely to give more guidance for 3-4 years once acquisition is closed.
- Lot of synergies in the deal – operational as well as better capacity utilization. Looking leverage synergies through this strategic partnership and cross-sell product range better to the clients.
- IAC has negligible debt on the books – short term debt of 20 cr
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