Pricol Ltd is to acquire 100 percent of the wiping systems business of the Ashok Piramal Group’s PMP Auto Components through its wholly owned subsidiaries.
PMP had acquired this business in 2008 from Magna and is currently operating manufacturing facilities in the Czech Republic, Mexico and India.
The business supplies wiper motors to global OEMs including Volkswagen, Fiat, John Deere, Skoda, Audi and Seat and has a turnover of around Rs 250 crore currently with a confirmed order book and revenue visibility of more than Rs 450 crore in FY2020.
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, helping it cement its status as a global supplier. Additionally, the acquisition will enable Pricol to increase its presence with passenger vehicle OEMs, thereby diversifying revenue streams and opening up multiple cross-selling opportunities.
Wiper systems business immune to global shift to EVs
Commenting on the acquisition, Vikram Mohan, managing director of Pricol, said: “This acquisition ties in well with our long-term strategy of driving growth and achieving product diversification. We believe that wiping systems is a growing product segment which would be largely immune to the ever-changing technological trends in the automotive sector and the eventual move to electric vehicles. With manufacturing presence in Czech Republic and Mexico, this acquisition fits in perfectly with our ongoing plans to establish presence in these regions. We are also very excited about the potential of this business in the Indian market and confident of extracting synergies.”
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. We are happy that an automotive focused group like Pricol is taking over this business and hope that they will take it to further heights.”
Plugging product gaps
In an interview with Autocar Professional last year, Pricol's Vikram Mohan had said, "As part of our aspirations to go global and fuel future growth, the company is aggressively looking at 2-3 acquisitions in Europe and the US. The acquisitions would be made to plug the gaps in Pricol's product portfolio. To fill in those gaps and gain entry into the larger European market, Pricol is eyeing two acquisitions in Europe (one each for pumps and sensors for CV, tractor, off-road instrument clusters) and one instrument cluster company in USA.
“The criteria to buy a company are based on five parameters including financial health, customer base, local management expertise, technology roadmap and quality of manufacturing asset. Unless three of them are complete, we won’t buy the company. It took us 2-3 years to identify the right assets," he said.
(With inputs from Kiran Bajad)