Jyoti CNC acquires French company for Rs 240 crore

Rajkot-based Jyoti CNC Automation, a CNC (computer numeric control) machine tool-maker has acquired Huron Graffenstaden, a France-based CNC high-precision machine manufacturer in an all-cash deal. The purchase price was arrived at after valuing the company at Rs 240 crore.

Confirming the development, Parakramsinh Jadeja, CEO of Jyoti said, "The association with Huron further expands our market position and extends our product range supported by leading edge technology and design capabilities. The transaction will be a catalyst for our growth plans especially at a time when the major automotive and aerospace markets such as Europe, Asia & North America are growing."

The initial synergies will emerge through an access to each other's markets. "We will immediately profit from the combination of our technology and R&D activities and the resulting ability to bring in new products quickly and at a globally competitive cost," he said.

In the recent past, Jyoti implemented an expansion programme of Rs 100 crore. Huron already had a commercial and industrial co-operation arrangement with Jyoti in the last two years.

Jadeja also said that Huron and Jyoti will combine their product portfolios.

"This will offer customers an access to an extended range of products, increased technological know-how and innovation resources.

By broadening its common distribution network, the combined entity can serve customers worldwide and thus be very close to local market demands. Customers today want global partners with a broad and high quality offering at competitive prices," he said.

Highlighting the rationale behind the acquisition, Jadeja said "The value creation in this transaction is based not only on consolidation and cost reduction, but increased growth potential".

According to him, Jyoti and Huron will become a one-stop leading CNC machine manufacturer. The company is positioned to expand its global footprint by focusing on growth especially in the developing markets such as India and China. Combined, the two companies will become a global CNC machine manufacturing powerhouse."

The transaction was financially supported by way of LBO financing facility from the international cell of Bank of India and co-funded by Bank of Baroda, he said.

"The common procurement strategy will also significantly contribute to the bottom-line. Our focus will be in design and technology leadership, along with the creation of a global platform."

Commenting on the transition strategy, he said, "Huron will continue its day-to-day business as before, keeping its management team and employee base intact. We will also deploy key functional people from Jyoti to support the fresh initiatives for Huron to capitulate the high growth demand from the Indian continent. There will also be cross cultural programmes aimed at adopting to the best practices available with the combined entity."