Acquisitions aren't exactly a novelty for Amtek Auto-the Delhi-headquartered auto component major has picked up six companies in the past 5 years. These include Ahmednagar Forgings, Smith Jones, Benda Amtek, Amtek Siccardi, GWK Amtek and Zelter, in domestic and overseas markets.
Last fortnight, Amtek was at it again, when it snapped up the assets of UK-based JL French (JLF). The rationale for the deal is straightforward: At full capacity, JLF is capable of generating revenues of $120 million (Rs 492 crore)-roughly three-and-a-half times the $35 million (Rs 143.5 crore) Amtek has paid out for the purchase. JLF is expected to report sales of $75 million (Rs 307.5 crore) in 2007.
JLF is a manufacturer of HPDC (high pressure die-casting) aluminium for automotive applications, and has customers like Land Rover, Jaguar, Trellborg, Ford and PSA (Peugeot). "We believe the usage of aluminium components in the global auto industry will go up in the near future," says Umesh Karne, Senior Research Analyst, Emkay Share & Stock Brokers. "For the year ended June '08, we can expect Rs 50-60 crore from JL French's assets in India," says Karne.
According to Karne, Amtek plans to shift all of JLF's UK assets to its Sanaswadi plant near Pune, which would add an incremental capacity of 20,000 tonnes to its existing aluminium foundry in Pune. "The total installed capacity after addition of these lines will go up to 40,000 tonnes," adds Karne.
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