Mahindra CIE buys Aurangabad Electricals
Mahindra CIE Automotive is acquiring Aurangabad Electricals for an enterprise valuation of Rs 875.6 crore
- Published 13.03.19, 1:17 AM
- Updated 13.03.19, 1:17 AM
- a min read
Auto component firm Mahindra CIE Automotive (MCIE) is acquiring Aurangabad Electricals Ltd (AEL) for an enterprise valuation of Rs 875.6 crore.
Founded in 1985, AEL is a manufacturer of automotive aluminum die casting products and has five manufacturing facilities in India across Aurangabad, Pune and Pantnagar.
Promoted by the Bagla group, it has more than 3,300 employees and had posted a turnover of Rs 651 crore in 2017-18. The company is a supplier to a number of domestic and global two-wheeler and passenger car OEMs.
A statement from MCIE on Tuesday said its board has resolved to acquire the business of AEL through the acquisition of 100 per cent equity shares for an enterprise value of Rs 875.6 crore in an all-cash deal, which includes a future deferred payment estimated up to Rs 62.2 crore.
The acquisition is proposed to be completed on or before April 10, it added. While the management team of AEL will be fully retained, the acquisition will be funded from cash in MCIE’s books.
“This acquisition allows MCIE to enter the aluminum die casting technology,” MCIE chief executive officer Ander Arenaza said.
He added AEL’s complementary product and customer mix led to further diversification of the business portfolio of MCIE India and that its presence in the two-wheeler space will be strengthened further.
MCIE is part of Spanish group CIE Automotive. While CIE through its subsidiaries holds a 56.28 per cent stake in the firm, the Mahindra group owns around 11.5 per cent.
Its key products are in technologies such as forgings, stampings, gears, magnetic products and composites. The company’s key customers in lndia are those in passenger cars, utility vehicles, light commercial vehicles, two- wheelers and tractors.
“We are convinced that the partnership with MCIE and CIE will give the company a great boost and allow AEL to benefit from global best practices in aluminum die casting,” AEL chairman and managing director Rishi Bagla said.
Shares of Mahindra CIE on Tuesday settled with gains of 0.25 per cent at Rs 240 on the BSE.