Automotive components supplier Mahindra CIE Automotive Ltd has acquired Aurangabad Electricals Ltd (AEL), an aluminium die casting firm, for ₹830 crore, Mahindra CIE said in an exchange filing on Tuesday.
Aluminium die casting is a process used to make smooth, defined metal parts by forcing them into a mold.
The acquisition will help Mahindra CIE foray into the aluminium die casting space, as well as strengthening its presence in the two-wheeler segment. The acquisition is expected to be completed by 10 April.
Founded in 1985, AEL is an aluminum die casting company based in Aurangabad with five manufacturing facilities in India in Aurangabad, Pune and Pantnagar. It supplies to a number of domestic and international two-wheeler and passenger original equipment manufacturers (OEMs) and Tier 1 auto component makers. It makes a variety of body, brake and engine parts through high pressure die casting as well as gravity die casting processes.
According to the filing, AEL’s turnover for the last three years- FY16, FYI7 and FYI8 were ₹565 crore, Rs. 569 crore and Rs. 651 crore, respectively. It reported a profit of ₹34.4 crore in FY18.
The acquisition follows Mahindra CIE’s previous major acquisition in 2016, when it acquired automotive forging company Bill Forge for ₹1,332 crore, in a cash and stock deal that aimed to help diversify its business and increase revenue and profit from Asian markets.
Mint reported last week that the Indian automotive components industry is set for a wave for consolidation as top private equity (PE) firms are buying and aggregating mid-sized auto parts makers to tap the lucrative global market.
In 2018, global PE giant Blackstone bought auto parts maker Comstar at a valuation of nearly Rs1,000 crore and soon after it acquired Sona BLW Precision Forgings. In April 2018, homegrown PE fund Kedaara Capital acquired Sunbeam Auto, which makes aluminium die casting parts for nearly ₹650 crore.
Also Read:
Top PE firms pushing consolidation in India’s auto-parts industry
India: After acquiring Bill Forge, Mahindra CIE Automotive looking for more
This article was first published on livemint.com.