TVS Group has acquired a majority stake in UK-based distributor of commercial vehicle parts and accessories, Universal Components, with a total investment of Rs 100 crore. The acquisition was funded through internal accruals.
The group has acquired 90 per cent of Universal Components through a special purpose vehicle, TVS Europe Distribution UK Limited, formed by its group companies Srichakra Tyres and Associated Autoparts, said R Dinesh, managing director of TVS Logistics Services Limited.
“We will utilise Universal Components’ marketing expertise and best practices in our businesses in India and other Asian markets. The acquisition will also help us to have a wider coverage of parts to distribute in the after-market,” he said.
With the two acquisitions, with the first being the buyout of Multipart Holdings in 2009, TVS Group's turnover in the UK would cross Rs 1000 crore and would employ nearly 500 people, according to a company announcement.
Headquartered in Sheffield, Universal Components has around 420 customers in the UK who are serviced through 650 distribution outlets. It sells parts worth approximately Rs 200 crore and employs around 100 people, selling both manufacturer-branded parts and its own range of UC-branded parts. The company has a range of product line items of around 14,000 and has plans to expand it to 25,000 line items in next three to five years.
The company is aiming to grow its revenues from the current 20 million pound to 40 million pound in the next three to five years, said David Kernahan, managing director, Universal Components.
“TVS Group companies offer an extended range of products and increase reliance on larger suppliers. We bring in established marketing capability for parts distribution,” he said, adding that TVS would help Universal Components to further increase its range of supplier relationships and also bring in low-cost country sourcing.
Meanwhile, Multipart, TVS Group’s supply chain services business, has been rebranded to TVS Supply Chain Solutions. Multipart is seen as an after-market brand and the company wanted to give another face for its distribution business through Universal Components.
Richard Slee, chief executive officer of TVS Europe, said that the company was looking at acquisitions in some of the other countries in Europe. The company expects to complete an acquisition in Turkey in the next 12 months, he said.
