Automotive components manufacturer Pricol has signed an agreement to acquire 100 per cent of the wiping systems business of PMP Auto Components.
The acquisition would be undertaken by Pricol through its wholly owned subsidiaries and the transaction will be funded by a combination of internal accruals and external debt.
The company said that the transaction would be EPS (earnings per share) accretive — increasing acquirer's EPS — to the shareholders of Pricol and the profitability is expected to further improve upon the integration of the business with Pricol.
PMP, which acquired the wiping systems business in 2008, currently runs manufacturing facilities in the Czech Republic, Mexico and India.
"With manufacturing presence in [the] Czech Republic and Mexico, this acquisition fits in perfectly with our ongoing plans to establish [a] presence in these regions," said Pricol Managing Director Vikram Mohan.
Harsh Piramal, managing director of PMP Auto Components said, "PMP has decided to divest this business as part of its strategic portfolio reallocation where this business has been determined as non-core."
The business is supplying wiper motors to global automotive customers, including VW, Fiat, John Deere, Skoda, Audi, Seat and has a turnover of around Rs 250 crore at present with a confirmed order book and revenue visibility of more than Rs 450 crore in the financial year (FY) 2019-20, it added.
The acquisition will help Pricol diversify its product offerings and provide access to manufacturing facilities in Europe and North America, where it currently does not have a footprint. Besides, the acquisition will help it in increasing presence with passenger vehicle customers, diversifying revenue streams and opening up multiple cross-selling opportunities.