Suprajit Engineering, a leading auto component manufacturer, announced the successful completion of acquisition of Wescon Controls, Wichita, USA, through its wholly owned subsidiary Suprajit USA Inc, by purchasing 100% outstanding equity share capital from Shell Topco LP managed by a Private Equity Fund - Nova Capital, UK.
Wescon Controls is a market leading manufacturer of control cables in the non-automotive Outdoor Power Equipment (OPE) space. It has marquee customers like MTD, Husqvarna, John Deere, TORO, Honda, etc., and is the largest manufacturer of OPE cables in North America.
With expected sales of USD 40 million and EBIDTA margin in the range of 16-18%, Wescon has its plant in Wichita, Kansas, USA and a Maquiladora facility in Juarez, Mexico. Wescon has been manufacturing cables since 1946. It has a strong management and engineering team with a leading market position in the North American non-automotive cable space.
This transaction was funded by Suprajit's cash balances and debt in an approximate ratio of 50:50. The enterprise value of Wescon was estimated at USD 44.4 million.
K. Ajith Kumar Rai, chairman and managing director of Suprajit Engineering said, ''Wescon is a perfect strategic fit for Suprajit. Wescon's market leading position in North America in the OPE segment is a significant sectoral de-risk for Suprajit in its core business of cables. This will also prepare a solid ground for Suprajit to continue to increase its exposure in both automotive and non-automotive business in the Americas. With the added strength of Wescon, new plants in India and judicious augmentation of capacities across its plants, Suprajit will emerge as the second largest cable maker in the world in the near term. We will continue our endeavour of efficient capital allocation and profitable growth.''
Shares of the company declined Rs 1.65, or 0.86%, to settle at Rs 190.00. The total volume of shares traded was 3,253 at the BSE (Friday).