Auto components maker Lumax Auto Technologies announced acquisition of OK Play Group's roto molded plastic business at an estimated enterprise value of around Rs 150 crore.
The board of directors at its meeting held on Monday approved the deal that will provide Lumax Auto Technologies Ltd (LATL) access to latest rota molding technologies, the company said in a regulatory filing.
The deal will also enable LATL to exploit fast-emerging growth opportunities in the automotive rota molded plastic fuel tanks market for commercial vehicles, tractors and off-road vehicles in view of changing environment, it added.
The initial purchase consideration will be based on an enterprise value that will be Ebitda multiple of 5.67 times, to be applied on 3 years average Ebitda of 2017-18, 2018-19 and 2019-20 of the auto component business of OK Play, it said.
The auto component business of the OK group had a revenue of Rs 42.9 crore and Ebitda of Rs 9.6 crore in 2016-17, Rs 109.6 crore and Rs 34.1 crore, respectively, in 2017-18. The same for 2018-19 stood at Rs 125.8 crore and Rs 38.3 crore, respectively, it added.
The balance 10 per cent consideration will be computed and paid based on six times of 2022-23 Ebitda of the acquired auto component business by July 31, 2023, subject to certain adjustments in accordance with definitive agreements to be entered into by the company.LATL further said that as part of the deal, it will provide a loan of Rs 20 crore to OK Play India Ltd (OKPI) on closing at simple interest of 12 per cent per annum, to be repaid by OKPI along with interest, by July 25, 2023.