Sona Comstar to acquire 54% stake in Serbian firm Novelic for 40.5 million euro

Auto component maker Sona BLW Precision Forgings (Sona Comstar) on Monday said it will acquire 54 per cent stake in Serbia-based Novelic for 40.5 million euro (around Rs 356 crore) enabling it to foray into the advanced driver assistance systems sensor market.

In a regulatory filing, the company said it has inked an agreement to acquire a stake in the firm, which is a leading provider of mmWave radar sensors, perception solutions and full-stack embedded systems.

Advanced Driver Assistance Systems (ADAS) sensors are a fast-growing category in the automotive industry, with a potential market size of around USD 43 billion by 2030.

Sona Comstar said the 40.5 million euro acquisition would be taken ahead through a combination of primary and secondary purchases with a staggered payment structure in the ratio of 60:20:20.

The transaction values Novelic at an enterprise value of 64.5 million euro on a pre-money basis and 75 million euro on a post-money basis, it added.

The transaction is expected to close by the end of the fourth quarter of FY23 and is subject to customary closing conditions, the company said in the regulatory filing.

"With this acquisition, we have added market-leading in-cabin radar-sensing technology to our technology offering. Increasing vehicle autonomy and automation is an emerging technology revolution in our industry," Sona Comstar MD & Group CEO Vivek Vikram Singh said.

Novelic Co-founder and CTO Veljko Mihajlovic said the company was founded with a clear mission to develop end-to-end capabilities in mmWave radar technology and to commercialise it through various product lines.

"For moving to the next phase of our growth, we are delighted to have a strategic partner in Sona Comstar which shares the same commitment to innovation and technology and will support us in scaling up our business," he added.

Sona Comstar said it expects the acquisition to be EPS accretive for Sona from the first year itself.

Novelic's 2022 revenue and PAT stood at around 9.3 million euro and 2.5 million euro, respectively.