Motherson Sumi Systems gained 1.29% to Rs 239.1 after the company's board of directors approved the acquisition of a majority stake in CIM Tools Private Limited.
Motherson Sumi said that the acquisition marks its entry into the aerospace industry. The company's entry into the aerospace segment is aligned with its growth strategy to venture into the non-automotive sectors as outlined in its five-year plan, Vision 2025.The transaction will provide Motherson Sumi, with access to a pedigreed customer base across the aerospace components supply chain along with specialised machining, treatment and sub-assembly capabilities. The proposed transaction is expected to be closed within 3 months, subject to receipt of necessary approvals.
As part of the deal, Motherson Sumi iwill acquire 55% stake from the promoters of CIM Tools Private Limited (CIM). The three founders, Srikanth GS, Umesh AS and Vishwanath Deshpande, will retain 45% stake in CIM and will continue to drive further growth, in partnership with Motherson Sumi.
CIM is engaged in machining and sub-assembly of components for the aerospace industry. ATPL is a vertically integrated unit engaged in surface treatment of machined parts and LCA is engaged in hard metal machining.
CIM has Rs 1500 crore plus (USD 200 million+) cumulative booked business potential currently. It reported a proforma consolidated turnover of Rs 203.1 crore in FY20 and Rs 129.6 crore in FY21.
Commenting on the deal, Vivek Chaand Sehgal, chairman of Motherson Sumi said, This acquisition is our first significant step towards growth in aerospace business. This is in line with our diversification strategy and will help us in strengthening our non-automotive business. This will be the 27th acquisition by Motherson, and we will continue to work towards adding more customers and products while serving diverse industries globally.
Motherson Sumi Systems is one of the world's leading specialised automotive component manufacturing companies for OEMs.
The company reported a consolidated net profit (concern share) of Rs 290 crore in Q1 FY22 compared with net loss of Rs 810.45 crore in Q1 FY21. Consolidated revenue from operations jumped 98% year-on-year to Rs 16,712 crore in Q1 FY22 as against Rs 8,431 crore in Q1 FY21.
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