The Ashok Piramal Group has sold its high-speed steel cutting tools business, Miranda Tools to Swedish Dormer Pramet, a division within Sandvik Machining Solutions Group for an undisclosed sum, the companies said in a joint release.
Miranda Tools has a significant market share in high-speed steel cutting tools business in India. “The acquisition enhances Dormer Pramet’s product offering and facilitates an improved presence in key markets such as India, China and Southeast Asia through an access to Miranda Tool’s distribution network and manufacturing facilities,” the release said.
With this, the textile, real estate to engineering services Ashok Piramal Group is looking to sell its non-core businesses. “As we go about re-aligning the Group’s businesses, we see a great fit for Miranda within Sandvik and this will help the Miranda management team further grow and strengthen the business,” said Nandan Piramal, Managing Director of Miranda Tools.
In 2019, Miranda Tools had revenues of about 200 million SEK and around 580 employees. Such precision engineering businesses are highly profitable and are valued at around 10-12 times EBITDA. Globally and in India, these businesses have around 25-28% EBITDA margins, experts said.
“The acquisition is aligned with Sandvik Machining Solutions’ focus on strengthening our round tools offer whilst also adding greater production capacity and flexibility to support long-term growth,” says Lars Bergström, President of Sandvik Machining Solutions.
Investment bank Lincoln International acted as the exclusive investment banking advisor to the shareholders of Miranda Tools.
There is a considerable in-bound interest for acquisition of such profitable engineering companies in India. “The transaction highlights the strategic fit between Sandvik and Miranda Tools’ businesses and also the continued interest of global buyers looking at strong manufacturing businesses in India,” said Preet Singh, managing director and head of Industrials at Lincoln International.
Source: Economic Times