Samvardhana Motherson to acquire Rollon Hydraulics for Rs 103 crore to enhance its machining business

Commenting of the deal, Vivek Chaand Sehgal, Chairman, Motherson said, he perceives this new acquisition to be closely aligned with Motherson's current business operations, presenting abundant prospects for expansion in India, Mexico, and other global regions.

Samvardhana Motherson International Limited (SAML), formerly known as Motherson Sumi Systems Limited announced on July 7 that it has entered into an agreement to acquire a 100 percent stake in Rollon Hydraulics Private Limited.

The acquisition is valued at an enterprise value of Rs 76.5 crore as of March 31, 2023. In terms of equity value, the cost of acquisition is Rs 103 crore for the complete stake.

SAML, an auto parts maker, stated in a regulatory filing that the transaction is expected to be concluded in the second quarter of the financial year 2023-24, subject to the satisfactory fulfillment of closing conditions.

Rollon Hydraulics, based in Bengaluru, possesses the capabilities to manufacture, assemble, and supply high-precision turned parts, spools, and other machined components with critical engineering applications. It operates two manufacturing facilities.

Through this acquisition, SAML aims to strengthen its existing Precision Metals & Modules division and venture into the construction equipment, agriculture equipment, and material handling markets by offering complex 'Spools & turned parts' for hydraulic valve applications.

According to the statement, the deal is likely to expand the auto component maker's existing machining footprint in India and Mexico. Rollon Hydraulics will be integrated into the Precision Metals and Modules division, which is part of SAML's Emerging Businesses division.

Vivek Chaand Sehgal, Chairman of Motherson, expressed his belief that this acquisition aligns closely with Motherson's current business operations and presents abundant prospects for expansion in India, Mexico, and other global regions.

SAML informed the stock exchanges that the acquisition is not considered a related party transaction and the promoter/promoter group has no interest in Rollon Hydraulics. Furthermore, no governmental or regulatory approvals are required for this acquisition, as clarified in the exchange filing.

Upon completion of the transaction, Rollon Hydraulics will become a wholly-owned subsidiary of Samvardhana Motherson International. The turnover of Rollon Hydraulics for the past three financial years is as follows: Rs 60.3 crore (FY23), Rs 60.4 crore (FY22), and Rs 45.6 crore (FY21), respectively.

On July 7, shares of Samvardhana Motherson International settled 0.14 percent lower at Rs 91.3.10 apiece on the BSE.