Lumax Auto Technologies on Monday said it has signed an agreement to acquire a majority stake in IAC International Automotive India from the International Automotive Components Group at an equity valuation of Rs 587 crore. As part of this deal, 75 per cent of the stake will be bought through SPV (acquisition vehicle) at Rs 440 crore, which will be paid in cash funded by debt and internal accruals, and IAC will continue to hold 25 per cent stake in it, the company said in a release.
The strong free cash flow generation in Lumax Auto Technologies Ltd (LATL) and IAC India will ensure debt repayment in the next five years, it added.
This strategic partnership will help the company expand its existing business in four-wheeler automotive plastics and offer customers with a wider product range.
A part of the Lumax-DK Jain Group, Lumax Auto Technologies is a tier-1 automotive systems and components supplier.
IAC India is a tier-1 interior systems and components supplier to key automotive OEMs in India.
IAC India has five manufacturing plants — two in Chakan (Pune) and one each in Manesar, Nashik and Bengaluru — besides an engineering centre in Pune with key capabilities in product designing and engineering, dimensional engineering, product development, program management and tooling development, it added.
IAC India’s day-to-day business and operations will continue to be managed by its existing professional management team, it stated.
“This is a marquee milestone in our long-term growth goals of strategic partnerships with global industry leaders. With our group’s existing expertise in automotive lighting and plastics, it provides the opportunity to combine competitive strengths across automotive lighting, plastics and interiors to provide complete solutions to our customers,” Deepak Jain, Chairman and Managing director of Lumax, said.
The IAC Group is a strategic supplier of powertrain-agnostic automotive interior and exterior systems and components to leading automotive OEMs across the world and operates 45 manufacturing facilities across 17 countries, according to the release.
“Together with Lumax, the IAC India business can be propelled upwards in the coming years. This partnership will offer an immense opportunity to expand our business in India and continue to deliver quality solutions to our customers,” David Prystash, Chief Executive Officer of IAC Group, said.
“Together with IAC, our goal will be to take this business to the next level by unlocking synergies across products, customers, technologies and manufacturing excellence,” Anmol Jain, Managing Director of Lumax, said.
KPMG Corporate Finance acted as the exclusive financial advisor for the transaction, according to the release.
