Rane (Madras) Limited (RML), maker of steering and suspension products and light metal casting components, has acquired the steering components business (SCB) of Yagachi Technologies Private Limited (YTPL), a part of Hical Group.
The board of Rane on October 13 approved the acquisition.
The cost of the acquisition is estimated to be in the vicinity of Rs. 25 crore. It is an all-cash deal, Rane said in a stock exchange filing.
The takeover is expected to be completed by December 2021. It will be acquired as a going concern on a slump sale.
SCB manufactures steering and suspension components such as inner ball joints (IBJ) and outer ball joints (OBJ). Its customers include, among others, Mando India, who in turn, serve original equipment manufacturers such as Hyundai, Kia, and Mahindra.
SCB has a technical collaboration with a leading South Korean ball joint company. The company reported revenue of Rs. 35.5 crore for FY21.
“The acquisition of steering components business of Yagachi will enhance Rane’s leadership position and share in the domestic passenger vehicle market and provide opportunity to enter export vehicle platforms to new geographies.,” said Harish Lakshman, Vice-Chairman, Rane Group, in a statement.
Established in 1960, RML is part of the Rane Group of companies, a leading auto component group based out of Chennai.
RML has two divisions - Steering and Linkages Division (SLD) and Light Metal Casting India Division (LMCI). SLD manufactures mechanical steering gears, hydrostatic steering systems and steering and suspension linkage products. LMCI makes low-porosity, high-quality light metal casting such as steering housings and engine case covers.
Through its overseas subsidiary Rane Light Metal Castings Inc. (RLMCA), RML manufactures high-pressure light metal casting components at its facility in Kentucky, US.
The group has been engaged primarily in manufacturing auto components for well over five decades.