Acquires company in the battery management system domain for EV vehiclesENDURANCE - 1736 Change: 13.75 (0.80 %)
News: The company has entered into a shares purchase agreement with shareholders of Maxwell Energy Systems Private Limited (Maxwell), for acquiring 100% of its equity share capital in a phased manner. Maxwell is in the business of embedded electronics particularly in battery management systems for vehicles including electric vehicles (EV) and for stationary storage systems. Endurance expects to complete acquiring 51% stake in Maxwell during Q1FY23 with balance 49% to be purchased in a phased manner in five tranches, spread over five years. Maxwell did a turnover of Rs. 19.5 crore in FY22 and is expected to double it in FY23 at ~Rs. 40 crore with affirmative order book of >Rs. 150 crore as on date.
Views: Total consideration to be paid by Endurance for the acquisition is Rs. 308 crore (Rs. 135 crore upfront for 51% stake and Rs. 173 crore spread out over five years linked to certain milestones), which optically looks expensive (~15x P/S on trailing basis) however is to be viewed with the potential that it holds given the thrust on electrification globally. Given the size of acquisition is small and healthy B/S at Endurance, we would rate it as neutral at this point in time and would await management commentary with the results conference call over the bigger plans with the target. Maxwell’s website mentions Ola, Tork Motors (Bharat forge entity) and Tata Motors among its clients with customers spread across 15 countries including India, France, Spain and the US