Motherson Sumi Systems rose 2.5% to Rs 289.55 at 12:06 IST on BSE, after the company signed an agreement to acquire the Wiring harness business of Stoneridge Inc.
The announcement was made during market hours today, 27 May 2014.
Meanwhile, the S&P BSE Sensex was down 176.88 points or 0.72% at 24,540
On BSE, so far 1.98 lakh shares were traded in the counter as against average daily volume of 2.05 lakh shares in the past one quarter.
The stock hit a high of Rs 296 and low of Rs 280.70 so far during the day. The stock hit a record high of Rs 306.50 on 22 May 2014. The stock hit a 52-week low of Rs 123.40 on 31 July 2013.
The stock had underperformed the market over the past one month till 26 May 2014, rising 6.85% compared with 8.94% rise in the Sensex. The scrip, however, outperformed the market in past one quarter, rising 26.09% as against Sensex's 17.77% rise.
The large-cap company has an equity capital of Rs 88.19 crore. Face value per share is Re 1.
Motherson Sumi Systems (MSSL) signed an agreement to acquire the Wiring harness business of Stoneridge Inc. through asset purchase at transaction value of $65.7 million (debt free and cash free). This acquisition is expected to close in the third quarter of 2014, subject to customary closing conditions. The acquired business has a turnover of approx. $300 million. The transaction includes six manufacturing facilities located in Portland, Indiana; Chihuahua, Mexico; Saltillo Mexico; and Monclova, Mexico; as well as an engineering and administrative center located in Warren, Ohio. This is by far the largest acquisition for the core business of wiring harnesses, MSSL said in a press release.
MSSL said that the acquired business has a history of 48 years of wiring harness manufacturing 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. It has strong synergies with the proposed business being acquired in terms of customer segments, products and global operations. With this acquisition, MSSL can service the customers in these regions as well as globally with its presence in other markets. This acquisition further strengthens MSSL presence in North America where it has in recent past, established wiring harness operations, MSSL said.
Motherson Sumi Systems' consolidated net profit surged 54.5% to Rs 302.53 crore on 25.6% growth in net sales to Rs 8289.01 crore in Q4 March 2014 over Q4 March 2013.
Motherson Sumi Systems supplies components, modules and systems to the automotive sector. Its business portfolio encompasses electrical distribution system (EDS), polymer products and complete module solutions. It is the largest supplier of EDS to the Indian automotive industry.
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