Sundaram Auto Components (SACL), wholly owned subsidiary of TVS Motor Company, is engaged in the business of manufacturing of automotive plastic components for passenger vehicles (two-wheelers, four wheelers) and commercial vehicles. Its turnover was Rs 727 crore in FY24.
With this acquisition, Pricol will see a consolidated topline addition of approximately Rs 730 crore combined with SACL’s healthy financial parameters that are value accretive to Pricol. The debt-free acquisition is being made through an all cash deal for an amount of Rs 215.3 crore and is subject to adjustments, if any, as defined in the business transfer agreement at the time of closing the deal.
Subject to satisfaction of conditions precedent identified under the business transfer agreement to be executed, the acquisition is expected to be completed by 31 January 2025.
Vikram Mohan, managing director of Pricol, said: “I express immense pride in welcoming the talented team at SACL into the Pricol family. With this acquisition, our focus will remain on harnessing the combined potential of Pricol and SACL, to become an integrated solution player, driving innovation, and delivering sustainable growth. SACL’s expertise and value systems perfectly align with our vision and core values which will enable us to meet the demands of our customers. This acquisition is a significant step towards realizing our commitment to a sustainable and transformative growth.”
K Gopala Desikan, Group CFO of TVS Motor Company said, “SACL has played a vital role in the TVS group for many years, establishing a significant presence in the Indian automotive component industry. As market dynamics evolve, and we allocate capital more efficiently in accordance with our strategic plans, we are delighted that Pricol, our trusted long-term supplier partner, is taking over the business. We are confident that they will uphold the same values and ethos, ensuring a smooth transition and continued growth.”
Meanwhile, the company’s board approved the investment in Pricol Precision Products upto an amount of Rs 120 crore in one or more tranches. It also approved to provide corporate guarantee for any loans to be obtained by Pricol Precision Products upto an amount not exceeding Rs 250 crore.
Further, the company’s board approved the proposal for investing upto 26% of equity capital of PQSI Digital, a company which is in the business of Industry 4.0 products, in more than one tranches.
Pricol is manufactures automotive components for motorcycles, scooters, cars, trucks, buses, tractors and Off-road vehicles used in the construction and Industrial segment. Pricol also manufacture sintered components and products for fleet management.
The automotive components manufacturer reported consolidated net profit of Rs 45.07 crore in Q2 FY25, up 35.95% as against Rs 33.15 crore posted in Q2 FY24. Revenue from operations increased 15.53% YoY to Rs 650.07 crore in Q2 FY25.