Camshafts major, Precision Camshafts now holds the full ownership of Netherlands-based Emoss Mobile Systems and German firm MFT (Motoren und Fahrzeugtechnik). The Solapur-based company has invested 0.6 million euro (Rs 5.19 crore) to hike its stake in Emoss from 51 percent, and spent 0.55 million euro (Rs 4.76 crore) to increase its stake in MFT from 76 percent to 100 percent in each company.
Precision Camshafts made these investments via PCL Holding, its wholly owned subsidiary in Netherlands. Autocar Professional had reported about Precision Camshafts’ plan to take full control of these companies in May 2018.
Emoss, a provider of electrification systems for commercial vehicles, and MFT, a specialist in machined components are part of three acquisitions that Precision Camshafts made within 18 months starting March, 2017. The third company was Memco, a Nashik based maker of fuel injection, brake components and others. After consolidating these acquisitions, Precision Camshafts is scouting for new opportunities in order to achieve sustainable growth in the long term when the demand for camshafts may shrink as the global electric vehicle (EV) industry achieves critical scale.
It is not clear yet if such an opportunity arises for the Indian company in China, the world’s largest ICE and EV market, and also a country which Precision Camshafts exited last year due to unsustainable operations of its camshafts business there. With the ongoing pandemic adversely affecting the financials companies, the valuation of some target companies could be lower than earlier. “Even prior to the pandemic we were scouting in the market for opportunities. However, obviously now presents a different picture altogether,” Yatin Shah, CMD, Precision Camshafts told Autocar Professional in an interview prior to the additional stake acquisition announcements made on Saturday.
Precision Camshafts is not the only Indian component manufacturer planning to make new inorganic moves. There could be few more players which are looking for acquisitions to enhance acquire new technological capabilities or add new customers or add new businesses and markets. Consolidation in the global component industry may be on the rise.