- 09 Dec 2024
- ICICI Securities
ANNOUNCES ACQUISITION OF 95% STAKE IN JAPANESE AUTO ANCILLARY COMPANY
News: In a press release, Samvardhana Motherson International Limited (SAMIL) has announced acquisition of 95% stake in Japanese auto components manufacturer i.e. Atsumitec Co. at an Equity Valuation of US$ 57 million, structured as a multi-step process involving a special purpose company (SPC) that will initially acquire shares from existing shareholders before SAMIL completes the purchase. Atsumitec, which specializes in high-precision machined components (gear shifters, chassis and transmission parts) for four-wheelers and two-wheelers and operates nine plants globally, currently has Honda Motor holding a 48.01% stake. This acquisition is aimed at enhancing SAMIL's business with Japanese OEMs, expand into new product lines, and improve access to global machining capabilities, with the deal expected to close by Q1FY26 pending regulatory approvals.
Views: Atsumitec Co., Ltd topline for FY24 was ~US$412 million (~₹ 3,500 crore), with a book value of ~US$207 million (~₹ 1,750 crore). SAMIL is acquiring 95% of the company at an Equity Valuation of US$ 57 million (~₹ 500 crore). Atsumitec had a net cash position on consolidated basis as of March 31st 2024. The acquisition is being done at inexpensive valuations of ~0.14x P/S, ~0.3x P/B and ~2x EV/EBITDA and is expected to be accretive for SAMIL. This is a positive development in our view.
Impact: Positive