 "Motherson Sumi to buy wiring business of US-based firm for $65.7 million")
"The company has signed an agreement to acquire the Wiring harness business of Stoneridge Inc through asset purchase at transaction value of $65.7 million," Motherson Sumi Systems Ltd (MSSL) said in a statement today.
The transaction includes six manufacturing facilities located in Portland, Indiana; Chihuahua, Mexico; Saltillo Mexico and Monclova, Mexico; as well as an engineering and administrative centre located in Warren, Ohio, it added.
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"With this acquisition, MSSL gets one of the most experienced wiring harness manufacturing operations in the region which would increase our customer reach, and most importantly add very talented team members who can help MSSL to service the customers in these geographies," Samvardhana Motherson Group Chairman Vivek Chaand Sehgal said.
Being done through a wholly owned subsidiary, the acquisition with base revenues of approximately $300 million would provide the company a strong launch pad for its 2020 targets, he added.
This acquisition is expected to close in the third quarter of 2014, subject to customary closing conditions. Stoneridge Inc's wiring harness business has a history of 48 years and is a well-established name in the markets it serves.
It supplies principally to the commercial vehicles, agricultural equipment, material handling equipment and off-highway vehicle segments.
MSSL, started as a wiring harness company in 1986. With this acquisition, it can service the customers in these regions as well as globally, the company said.
"The acquired business would now have access to expertise of MSSL in the areas of wire harnesses, wires, wiring harness components including connectors, terminals, protectors, fuse and relay boxes and junction boxes," it added.
This is by far the largest acquisition by MSSL for the core business of wiring harnesses, it added.
Citigroup Global Markets Inc acted as the exclusive financial advisor for the transaction to MSSL.
MSSL shares were trading at Rs 288 apiece on the BSE, up 0.88% from its previous close.