Varroc to acquire US-based Visteon Lighting for $75-100 mn

12 MAR, 2012, 08.20PM IST, PTI 


MUMBAI: Aurangabad-based privately-owned Varroc Group today announced signing of a deal with US-based Visteon Corporation to acquire the latter's global lighting business for USD 75-100 million (about Rs 500 crore).

"We have signed a deal with Visteon Corporation, a global automotive components maker, to acquire its global lighting business for USD 75-100 million. The deal will include acquisition of six manufacturing operations employing over 4,000 people which includes an engineering centre with over 400 engineers located in low cost countries like Mexico and Czech Republic," Varroc Group's majority shareholder and Chief Executive Tarang Jain told PTI here.

The company is expected to raise funds required for acquisition through private equity, Jain said.

The two companies expect to complete the deal in the third quarter 2012.

With this acquisition Varroc Group will become the largest Indian automotive lighting manufacturer and it will be amongst the top three component manufacturers in the automotive industry in the country, the company claimed.

Varroc Group provides components for two-three and four-wheel passenger and commercial vehicles and has 26 plants, of which 20 are in India, five in Europe and two in Southeast Asia employing around 5,000 people.

The acquisition is a major step in our vision of achieving USD 4 billion revenues by 2020 against USD 613 million in FY 12. Our annual revenues will be close to Rs 6,000 crore with this acquisition, Jain said.

The acquisition will also help Varroc to enter into global automotive exterior market for 4 wheelers. The company presently has strong presence in two wheeler lighting business, Verroc's president of electric division Vineet Sahni said.

(Source : http://economictimes.indiatimes.com/news/news-by-industry/cons-products/electronics/varroc-to-acquire-us-based-visteon-lighting-for-75-100-mn/articleshow/12235401.cms)

Auto parts firms see scope for shopping

By R Srividhya Jan 29 2012 , Chennai


Distressed assets up for grabs in Europe
Europe’s ongoing debt crisis may well turn out to be an attractive shopping opportunity for Indian engineering and auto components companies. Many distressed assets in Europe, especially in the engineering and automotive hubs of Germany, Italy and France, are up for sale, and Indian companies are keen to make acquisitions that will facilitate their wider global presence.

PE and VC firms admit that they are working on such deals, and at least a handful expected to close in the next one-two months. Only two weeks ago, Aurangabad-based component maker Varroc Group acqu­ired 80 per cent in Europe's largest two-wheeler headlights and taillights maker TriOM. Around the same time, JBM Group acquired Italy-based engineering services company Tesco Go.

Spurred by the advent of major carmakers to India over the past 20 years, India has built a formidable domestic components industry with a turnover of $40 billion that is projected to grow at 11 per cent annually to $113 billion by 2021, manufacturing electrical parts, equipment, suspension and braking parts, body and chassis, engine parts, and drive transmission and steering systems. Automotive Components Manufacturers’ Association (Acma) projects the industry’s total investments at up to $2.5 billion during FY12, up from $2.3 billion in the previous year. Exports are projected to grow from a little $5 billion now to $29 billion in 10 years.

“The valuations of companies in Europe are quite attractive now. Indian companies can make acquisitions there, get access to new technology and clients and move manufacturing units here as factory production is more expensive in Europe,” Jacob Kurien, partner, New Silk Route pointed out.

The company has been advising Rajkot-based hot forged rings maker, Rolex Rings for an acquisition or a joint venture in Europe.

“In the months to come, we expect a lot of overseas M&A activities to happen in the engineering and auto components space. We are advising a few deals ourselves,” C Venkat Subramanyam, founder and director of investment bank Veda Corporate Advisors told Financial Chronicle. Veda provides advisory services in the private equity and M&A space.

“For companies having the strategic perspective

to expand, this is a good time to look for an European buy.

The acquisition will give Indian companies a good global platform, advanced technology and production base in that part of the world and in proximity

to clients,” said Nishant Arya, executive director, JBM Group.

JK group company and maker of industrial belts Fenner (India) is looking to buy companies that have similar technology and customer access in different locations in

Europe, according to

the its president AN Ravichandran.

Valuations may be attractive and access to newer technology easier through such acquisitions, but getting the right cultural and technological fit is also important when making such acquisitions, industry members said.

“We have been seeing industry members scouting for acquisition opportunities in automotive hubs right from Germany to as far as Macedonia. But companies should also look at a merger that is seamless operationally, legally and culturally,” asserted Vinnie Mehta, executive director, Acma.

It would be wrong to make an acquisition just because it’s available cheap, industry members said. Recently, Kolkata-based Ruia group ran into trouble while taking control of its recent French acquisition, Preciturn,

after local workers opposed the move.

"I do not know if the current EU situation will cause more opportunities for M&A. Rane would still look at acquisitions more from a strategic fit rather than mere low valuation," reasoned L Ganesh, chairman of leading auto component house Rane Group.

As per the latest financial data available with company data provider Capitaline, 99 listed auto components companies have posted a combined annual turnover of Rs 68,862 core, with net profit of Rs 4,011 core.

Of these companies with more than billion-dollar turnovers are Motherson Sumi (Rs 8,175.63 crore; exports 61.88 per cent), Sundaram Clayton (Rs 7,229.68 crore; exports 15.3 per cent) and Bosch (Rs 6,699.11 crore; exports 12.76 per cent). Other major components makers include, Exide, Tata AutoComp Systems, Amtek Auto and Amara Raja Batteries.

(With inputs from G Balachandar in Chennai and Amit Mudgill in New Delhi)

(Source : http://www.mydigitalfc.com/news/auto-parts-firms-see-scope-shopping-351)

Ruia’s takeover bid for German auto component maker fails

Meteor Gummiwerke was, by far, the biggest by revenue in a series of acquisitions announced between May and September last year


Manish Basu


Kolkata: Chartered accountant-turned-takeover specialist Pawan Kumar Ruia has washed his hands of Meteor Gummiwerke KH Badje GmbH and Co.—an embattled German automotive component maker that he was to acquire from a trust representing its controlling shareholders—after he failed to inject cash for a rescue.

Ruia had in May last year announced that he had concluded a deal to take over Meteor Gummiwerke for an undisclosed price, described by the German firm as “symbolic” in one of its statements.

Pawan Kumar Ruia, chairman, Ruia Group. Indranil Bhoumik/Mint

The acquisition of this firm, along with two others announced in close succession last year, would have catapulted the Ruia Group to a leadership position in manufacturing rubber sealing systems for the automobile industry.
Meteor Gummiwerke was, by far, the biggest by revenue in a series of acquisitions announced between May and September last year.

But, strapped for cash, the Ruia Group had to abandon almost all the acquisitions one by one—in France, Turkey and Germany—of rubber sealing system makers it had announced in 2011.

Meteor Gummiwerke had in 2010 earned €222 million (Rs. 1,438.5 crore today) in revenue from the sales of rubber sealing systems to car makers such as Bayerische Motoren Werke AG (BMW), Daimler AG, Fiat SpA, Renault SA and Porsche Automobil Holding SE.

Founded in 1954, Meteor Gummiwerke has three plants in Germany, two in the Czech Republic and one in the US. It employs at least 2,500 people.

After the Ruia Group failed to infuse cash to revive it, Meteor Gummiwerke on 13 January filed for bankruptcy and an administrator was appointed by a German court, according to a statement issued by the administrator.

The Ruia Group’s takeover of Meteor Gummiwerke was to be concluded in early October. The firm had even posted a statement on its website saying the deal had been concluded, with the Ruia Group paying shareholders the price agreed upon and bringing in the cash it had committed to revive the firm— an indication that the deal collapsed at the 11th hour.

In an emailed statement, the Ruia Group said: “(At) the time the management (of Meteor Gummiwerke) decided to take the company to insolvency (administrator), Ruia Group was neither in management of the company nor any shares were transferred to it.”

Emails sent to Burkhard Bruhl, Meteor Gummiwerke’s chief executive officer, were not answered.

The insolvency administrator is currently helping Meteor Gummiwerke find a new buyer, and the Ruia Group is “out of the game”, according to Hildesheimer Allgemeine Zeitung, a German newspaper.

A contract was signed but did not become effective because the Ruia Group did not pay, said a spokesperson for the insolvency administrator in an emailed statement. As a result, Ruia never became the owner of the company.

Christopher Seagon, the administrator, “is now stabilizing the business operations and will likely set up a process of finding a new investor,” he added. A statement by Seagon earlier said the firm’s Czech and US subsidiaries had been kept out of the insolvency proceedings.

In October, Ruia had said his acquisition of Standard Profil AS, a Turkish firm, was “under review” in the light of the “global economic slowdown”. He later admitted to have abandoned the proposed acquisition. The Ruia Group had announced its plan to acquire Standard Profil in May.

Last month, the Kolkata-based group headed by Ruia also lost control of a key unit of Groupe Preciturn, a French auto component maker that it was to acquire. In early December, one of Groupe Preciturn’s units was declared bankrupt and seized by a commercial court in France.

In India, the Ruia Group is under fire from tyre maker Dunlop India Ltd’s creditors. The group acquired Dunlop in 2005. A number of creditors have filed wind-up petitions in the Calcutta high court seeking appointment of an administrator to take over Dunlop’s assets. The company has suspended operations and has asked the court for time to prepare a repayment plan.

In an interim order, the court restrained Dunlop from transferring its assets, scuppering the Ruia Group’s plans to transfer to itself the rights to 100-odd trademarks currently owned by the beleaguered tyre maker.

(Source : http://www.livemint.com/2012/01/24001030/Ruia8217s-takeover-bid-for.html?h=B)

Raymond To Acquire Majority Stake In Trinity India

By : Irfan Khan | 5 January 2012


Raymond is acquiring majority stake in forged auto components maker - Trinity India Ltd through it's subsidiary Ring Plus Aqua Ltd.

Pune based Trinity India Ltd was incorporated in January 1974 by JC Basu, Ranjan Banerjee and YC Kurle.The company has raised equity funding from Tata Investment Corporation Ltd (erstwhile - Investment Corporation of India) and Altina Finance Pvt Ltd. Tata Investment holds 8.8% stake in Trinity while Altina has 6.7% stake.

Trinity India has five manufacturing units, four located at Bhosari and one at Shikrapur with a forging capacity of 12,500MTPA. Trinity India exports more than 60% of its total sales and it's clientele includes Tata Motors, Maruti Suzuki, Ford India, Force Motors, Turbogears and Iljin Auto Motors among others.

Trinity Operational Performance

(In Rs. Mn)	2011	2010
Revenue	847.30	647.90
PAT	5.80	2.02
Share Capital	67.72	67.72
Reserves	163.05	161.13
Debt	214.91	242.0

Trinity had filed a DRHP in 2008 but the IPO never happened. Trinity was looking to raise funds for expanding the forging capacity.


Ring Plus Aqua Ltd manufactures ring gears, flex assmeblies and precision sheet metal components. It manufactures its automotive components at two separate locations in integrated factories at Sinnar near Nasik. The company was was acquired by Raymond in July'05 through it's wholly owned subsidiary Scissors Engineering Products Ltd.

Earlier this year, Ring Plus announced it's plans to invest R200Cr to invest it's auto components business which included entering the forging segment through acquistion.

In a seperat transaction, Raymond sold it's stake Rayves Automotive Textile Company Private Limited to Japan based T B Kawashima Company Limited.

Rayves Automotive Textile was a JV between Silver Spark Apparel Ltd, a subsidiary of Raymond and Treves S.A of France offering printed seating fabric for TATA Motors' - Magic IRIS.

(Source : http://www.dealcurry.com/2012015-Raymond-To-Acquire-Majority-Stake-In-Trinity-India.htm)

Continental AG to invest over Rs 800 crore in India by 2013

8 JAN, 2012, 12.09PM IST, PTI


NEW DELHI: German auto component-maker Continental AG will invest over Rs 800 crore in India over the next two years to strengthen its operations in the country, as well as make an entry into the radial tyres segment.

While the firm will spend Rs 500 crore to ramp up its electronics division and enhance its R&D capabilities, it will pump in over 50 million euros (about Rs 330 crore) to get into the radial tyre segment. The company acquired Modi Tyres for 18.5 million euros last year.

"We will invest Rs 100 crore every year on electronics equipment. This will be for introducing new products from our Bangalore plant and supporting new customers," Continental AG Member of the Executive Board (Division Interior) Helmut Matschi told PTI at 11th Auto Expo here.

In addition, the auto major will invest Rs 150 crore every year on its R&D division, he added.

Continental Automotive Components (India) currently employs 800 people in its R&D wing.

"We will invest 50 million euros at Modi Tyres' plant at Modipuram, in UP. We will launch radial tyres for both commercial and passenger vehicles from the plant by 2013," Matschi said.

The company will commence production of radial tyres with an initial capacity of 8,00,000 units a year.

Continental Automotive Components (India) Managing Director Claude d'Gama Rose said the company plans to increase the production capacity of cross-ly tyres from the plant to 10 lakh units annually from 5 lakh units at present.

Asked about its workforce, he said the company will hike its manpower strength at Modipuran by 800 by next year.

The company has six more manufacturing facilities at Bangalore, Manesar, Pune, Gurgaon, Sonepat and Kolkata for production of various automotive and non-automotive products for the Indian market.

Continental Automotive Components (India) had registered a sales revenue of about 200 million euros in 2011 and is expecting to grow "faster than global operations", Matschi said.

Globally, the company witnessed growth of about 11 per cent in revenues last year to 29.5 billion euros.

(Source : http://economictimes.indiatimes.com/news/news-by-industry/auto/auto-components/continental-ag-to-invest-over-rs-800-cr-in-india-by-2013/articleshow/11411142.cms)

JBM Group Acquires Majority Stake In Engg Services Provider - TescoGo SPA

Auto components manufacturer - JBM Goup has acquired 51% stake in Italy based engineering services company - Tesco Go SPA for about R200Cr(wsj.com) thorugh it's group entity JBM Cadmium Pvt Ltd.

Founded in 1968, Tesco Go provides engineering services to Italian and international clients in automobiles, aerospace and engineering. The company has a presence in Detroit, London, Munich, Stuttgart and Turin has a staff of around 300 resources. The company had a turnover of $20Mn last year and it's clientele includes Mercedes Benz/Daimler, Ford, Tata, Fiat, Lamborghini, Bajaj and Piaggio, among others.

JBM Group has over 33 plants at 14 locations under its fold. It has 14 companies which supply to manufacturers like Maruti, Tata Motors, Bajaj, General Motors, Volvo and Ford, among some others. Other auto component companies in it's fold includes JBM Auto and Jay Bharat Maurti among others.

Since 2009, JBM is looking at expanding it's base in overseas markets, particularly in emerging markets like China and Mexico through acquisitions. At present, 4% of its revenues come from international markets, which includes countries in Western Europe and North America.

Other Indian auto component maker have also made cross border acquisitions in past couple of years. Most recently, Aurangabad based auto component maker - Varroc Group acquired 80% stake in Italy based two-wheeler headlights and tail lights maker TriOM SPA. In June last year, Dynamatic Technologies Ltd acquired German automotive component maker Eisenwerke Erla GmbH, through its wholly owned subsidiary, JKM Erla Automotive Limited.

(Source : http://www.dealcurry.com/2012014-JBM-Group-Acquires-Majority-Stake-In-Engg-Services-Provider-TescoGo-SPA.htm)

Varroc purchases 80 percent share in Italian Headlight Company

2 JAN, 2012, 04.38AM IST, KETAN THAKKAR,ET BUREAU

MUMBAI: Indian auto component maker Varroc Group has acquired 80% stake in Europe's largest two-wheeler headlights and tail lights maker TriOM SPA for an undisclosed amount, said two people familiar with the development.

When contacted by ET, Varroc MD Tarang Jain confirmed the acquisition. However, he refused to disclose the ticket size of the deal, as the transaction is still subject to regulatory approvals in Italy.

"This acquisition helps us in two ways; it strengthens our technology and widens our product portfolio. It also allows a bigger global reach," said Jain.

"TriOM's plan to set up a plant in Vietnam will give us a big gateway to reach out to the fast growing Southeast Asian markets, which is our big focus going ahead," he added.

Varroc Group's top management, including CFO Padmanabhan, corporate legal head Sanjay Sachdev and Varroc Electrical President Vineet Sahni, are currently in Italy to finalise the deal.

Italy-based TriOM is a supplier to leading global automobile companies, including Piaggio, Honda, Yamaha and Ducati, with nearly 55% market share in Europe. It has two plants - one in Turin in Italy and other in Romania. The company is setting up a plant in Vietnam to cater to the fast-growing two-wheeler market in the Asean region.

Varroc Group, which has Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Volkswagen and Bajaj Auto among its clientele, had appointed Ernst & Young for the acquisition.

The entire transaction took two months to complete. Through this acquisition, the Rs 3,000-crore Varroc Group will be able to penetrate switches, instrument clusters and electronic parts segments for two-wheelers in Europe and Southeast Asia.

"The acquisition will add approximately 20 million to Varroc's top line. It's a strategic acquisition from Varroc Electrical's global expansion perspective," said Vineet Sahni, president, Varroc Electricals.

Varroc Group has been growing at a CAGR of 20% in the last 4-5 years. The group is aiming for a turnover of Rs 5,000 crore by 2013-14, a growth of more than 60%, with joint ventures and acquisitions as major drivers.

The company said TriOM is a profit making company, but there are other attractive buys it may look at in Europe. The group has already set aside $100 million for acquisition over the next one year.

"We are in talks with some European players in the area of forgings and machining and we are looking at an acquisition in electrical and electronic space which offers us a strong technology," Jain said.

Experts said with Europe going through one of its worst crisis, there are ample acquisition opportunities, but at the same time it will be a challenge for buyers to draw their business plans.

"It is a good opportunity for healthy auto component companies to look for acquisitions in Europe, especially for technology. But they need to have a plan in place to keep business profitable and sustainable over a period a time. The key may lie in expanding geographies and integrating operations with India to keep the cost low," said Abdul Majeed, partner, automotive practice, Price Waterhouse.

(Source : http://economictimes.indiatimes.com/news/news-by-industry/auto/auto-components/auto-parts-maker-varroc-buys-80-in-italian-headlight-firm/articleshow/11332683.cms)