Motherson Sumi Systems (MSSL), a global automotive supplier, on Friday announced the acquisition of a majority stake in CIM Tools, one of the leading suppliers in the aerospace supply chain, based in Bengaluru, India. This milestone acquisition will mark MSSL's entry into the aerospace industry.
MSSL will acquire 55% stake from the promoters of CIM Tools (CIM). CIM in turn will hold 83% in Aero Treatment (ATPL) and currently holds 49.99% in Lauak CIM Aerospace (JV with Lauak International, LCA). CIM, ATPL and LCA are hereinafter referred to as "CIM Group".
The three founders, Srikanth GS, Umesh AS and Vishwanath Deshpande, will retain 45% stake in CIM and will continue to drive further growth, in partnership with MSSL.
CIM has Rs 15 billion+ (USD 200 million+) cumulative booked business potential currently. It reported a proforma consolidated turnover of Rs 2,031 million in FY20 and Rs 1,296 million in FY21.
CIM is engaged in machining and sub-assembly of components for the aerospace industry. ATPL is a vertically integrated unit engaged in surface treatment of machined parts and LCA is engaged in hard metal machining.
MSSL's entry into the aerospace segment is aligned with its growth strategy to venture into the non-automotive sectors as outlined in its five-year plan, Vision 2025.
The transaction will provide MSSL, access to a pedigreed customer base across the aerospace components supply chain along with specialised machining, treatment, and sub-assembly capabilities. The proposed transaction is expected to be closed within 3 months, subject to receipt of necessary approvals.
Commenting on the deal, Vivek Chaand Sehgal, Chairman, Motherson said, "This acquisition is our first significant step towards growth in aerospace business. This is in line with our diversification strategy and will help us in strengthening our non-automotive business. This will be the 27th acquisition by Motherson, and we will continue to work towards adding more customers and products while serving diverse industries globally."
Shares of the company gained Rs 1.05, or 0.44%, to settle at Rs 237.10. The total volume of shares traded was 1,341,042 at the BSE (Friday).
