Motherson Sumi Systems Ltd (MSSL), the flagship company of the Samvardhana Motherson Group (SMG), through its subsidiary Samvardhana Motherson Automotive Systems Group (SMRP BV), has announced the proposed acquisition of Reydel Automotive Group (Reydel), a privately held portfolio company of Cerberus Capital Management (Cerberus) that manufactures interior components and modules for global automotive customers.
The purchase price for the transaction is US$ 201 million (Rs 1270 crore). This would be the 21st acquisition from the Samvardhana Motherson Group and will help bolster Motherson’s offerings in the automotive Interiors space.
Reydel’s interiors product portfolio includes instrument panels, door panels, console modules, decorative parts and cockpit modules. Reydel’s global presence spans 20 plants and 16 countries, and is supported by a workforce of approximately 5,650 associates. The acquisition would enable both companies to capitalise on new opportunities in their existing and new geographies, as well as within each others’ customer portfolios. Reydel’s revenue for the year ended December 31, 2017 was US$ 1,048 million (Rs 6,620 crore) and EBITDA was USD 68 million (provisional, and in accordance with US GAAP).
“With world class development capabilities and strong customer relationships, we found great alignment with our existing offerings at Motherson,” said Vivek Chaand Sehgal, chairman, Samvardhana Motherson Group (pictured above). “The synergistic combination of complimentary portfolios will create a stronger business. We are very excited about this partnership. It brings us closer to meeting our 2020 targets and helps us achieve ‘3CX 15’, our strategy to not have any component, customer or country contributing more than 15 percent to our business.”
“We are proud to have contributed to Reydel’s significant accomplishments in recent years,” said Dev Kapadia, senior managing director of Cerberus and co-chair of the Cerberus Private Equity Investment Committee. “Following a successful carve-out from Visteon, we partnered with the business to develop a high-performing and focused management team that was able to vastly improve financial performance. Since our acquisition in 2014, Reydel’s EBITDA has transformed from US$ 16 million in 2013 to US$ 68 million in 2017. Samvardhana Motherson Group is a world class company, and this transaction would fulfill one of our key objectives, which is to position the business with a leading entity that will take Reydel to an even higher level of performance and success.”
Benoit Rolland, CEO of Reydel, said, “The Cerberus team has been a great partner for Reydel during our efforts to improve our profitability and carve-out the business. We look forward to joining the Samvardhana Motherson Group, and this transaction would ensure that we will have excellent opportunities as part of one of the world’s leading suppliers to the automotive industry.”
Mahindra & Mahindra a Reydel customer
Reydel Automotive Holdings, is a global player in instrument and door panels, with an average relationship of 25+ years with global OEMs. The Baarn, headquartered company has 20 manufacturing facilities spread across 16 countries and an employee strength of 5,650. The global customer base includes PSA, Renault, RSM (Renault Samsung Motors), SsangYong, Mahindra, Volkswagen and General Motors.
According to MSSL, the acquisition will enable a stronger and diversified interior business portfolio through amalgamation of complementary portfolio and capabilities. It states that the diversification in customer profile and geography is in line with SMG’s strategy of 3CX15 (no country, customer or component should be more than 15 percent of its total turnover), that will have a stronger growth potential with French OEMs, which will enable it to bid for global platforms. The potential leverage from Reydel’s footprint will help it to service key SMG customers, along with sizable synergy potential across functions with a management team that has significant experience in the automotive sector.
It aims to have a revenue of $18 billion (Rs 113,706 crore) in FY2019-20