Samvardhana Motherson Intl acquires Lumen Gr, Deltacarb SA for Rs 575 cr

Auto components maker Samvardhana Motherson International Ltd on Friday announced the acquisition of Australia's Lumen Group and Deltacarb SA of Switzerland for nearly Rs 575 crore.

The company's board of directors has approved the two acquisitions of Lumen Group and Deltacarb SA by Samvardhana Motherson Automotive Systems Group BV, a wholly owned subsidiary, Samvardhana Motherson International Ltd (SAMIL) said in separate regulatory filings.

Lumen Group consists of Lumen Australia Pty Ltd, Lumen International Holdings Pty Ltd (which further owns 100 percent of Lumen North America, Lumen Thailand, Lumen Europe and 90 percent of Lumen South Africa), Lumen Engineering Solutions Pty Ltd and Lumen Special Conversions Pty Ltd, it said.

However, Lumen South Africa will not be included and merger control approvals are required from authorities in South Africa, the company said.

The acquisition of the Lumen group is expected to be completed in the fourth quarter of financial year 2023-24, subject to satisfactory completion of all conditions precedent, SAMIL added.

The group is engaged in the design, manufacture and supply of OEM certified automotive parts, accessories and dealer-fitted products.

As for the acquisition costs, SAMIL said it calculates “an enterprise value of AUD 93 million (nearly Rs 520 crore) of equity based on closing adjustments to accounts payable/debt-like items and working capital”.

There will be additional potential payouts based on achieving operating performance in FY24 and FY27, the company said.

By acquiring the Lumen group, SAMIL said it would gain entry into the OEM (Original Equipment Manufacturer) branded accessories segment, which is a highly lucrative segment globally.

Additionally, the company said that the synergy between the product range provides an opportunity for cross-selling and also an opportunity to explore untapped business potential by upselling from the global locations into the genuine accessories and dealer fit segment.

In a separate filing, SAMIL said that for the acquisition of Deltacarb SA, the total purchase price will be up to CHF 4.5 million (Rs 43 crore), with approximately 10 percent of the purchase price being a deferred payout, based on business performance over the next three years.

“In addition, SAMIL will assume the net debt including lease obligations (approximately CHF 1.2 million from December 2022),” it added.

Deltacarb SA is engaged in the engineering, production and sale of special and standard products based on tungsten carbide for various industrial applications such as stamping, wear-resistant parts, metalworking and mining.

It has one production facility in Switzerland.

The acquisition of Deltacarb will help in the “acquisition of specific technology and know-how in the field of tungsten carbide with the ability to design and manufacture precision parts required in a variety of industries for wear-resistant applications and metalworking,” SAMIL said, adding that it is synergistic with its precision metal and modules division.