India's largest automotive component maker Motherson Sumi Systems Limited (MSSL) on Monday announced the proposed acquisition of Reydel Automotive Group (Reydel), a privately held portfolio company of Cerberus Capital Management, L.P. (Cerberus) that manufactures interior components and modules for global automotive customers, for $ 201 million. This is the company's 21st acquisition worldwide.
Reydel itself is a diversified component player with presence in 16 countries through 20 factories. Its interiors product portfolio includes instrument panels, door panels, console modules, decorative parts and cockpit modules. It had revenues of $1,048 million and operating profit of $68 million for the year ended Dec 31, 2017.(provisional, and in accordance with US GAAP).
The acquisition is expected to enable both companies to capitalise on new opportunities in their existing and new geographies, as well as within each others' customer portfolios. "With world class development capabilities and strong customer relationships, we found great alignment with our existing offerings at Motherson," said Mr. Vivek Chaand Sehgal, Chairman of Samvardhana Motherson Group, the parent of MSSL. "The synergistic combination of complimentary portfolios will create a stronger business. We are very excited about this partnership. It brings us closer to meeting our 2020 targets and helps us achieve '3CX 15', our strategy to not have any component, customer or country contributing more than 15% to our business."
Over the last decade, the group has gained scale by picking up assets across the world like wiring harness firm PKC Group PLC of Finland, assets of Scherer & Trier, wiring harness business of Stoneridge Inc and Spain's suspension parts and powertrain supplier Sintermetal S.A. In 2015, Sehgal set a bold target to achieve a revenue of $ 18 billion for MSSL and $ 26 billion for SMG. In FY17, MSSL's turnover stood at $6.5 billion while SMG clocked a turnover of $9.1 billion.
With over 370 companies spread at 230 locations in 37 countries, 25 joint venture partners and over one lakh people, SMG is India's largest auto part conglomerate. "We look forward to joining the Samvardhana Motherson Group, and this transaction would ensure that we will have excellent opportunities as part of one of the world's leading suppliers to the automotive industry," said Benoit Rolland, CEO of Reydel.