The Sona Group's Sona BLW Precision Forging, a leading company in automotive drivetrain solutions, Blackstone, the global alternative asset management firm, and Comstar Automotive Technologies, Blackstone’s automotive portfolio company focused on global, electric charging and starting solutions, have forged a partnership. Their coming together is to create an India-centric, EV-focused, automotive technology platform called Sona Comstar.
Blackstone, one of the world’s largest alternative asset management firms, aims to create an auto component platform to execute a buy-and-build thesis in India. As part of this, Blackstone acquired Comstar Automotive Technologies in 2018. Comstar designs, engineers and manufactures starting and charging systems for passenger and light commercial vehicles worldwide.
Comstar’s products include BSG and ISG systems for full-hybrid vehicles, start-stop starter motors for mild hybrid vehicles, starter motors for conventional engines, as well as BLDC motors, alternators and other electrical motors. The Chennai-headquartered company with an installed capacity of over 6.8 million electric motors, operates manufacturing facilities in India, USA, Mexico and China. Comstar is reputed for its zero PPM quality standards and its innovation culture which has helped the company produce 'Photon' - the world’s lightest starter motor.
Sona BLW, which recorded a consolidated turnover of Rs 2,882 crore (US$ 400 million), designs and manufactures precision forged bevel gears and differential assemblies for passenger, commercial and off-highway vehicles with a strong presence in electrical vehicles. It is a technology leader in its field with 85 percent market share of precision forged differential gears in India, 25 percent in the European market and 12 percent of all vehicles globally. With its contracted pipeline, the company says it is also set to grow in the differential assembly systems’ market as well. Sona BLW has 6 manufacturing plants spread across North and West India, and its European subsidiary operates 4 plants - Germany (3) and Hungary (1).
As part of this current transaction, Blackstone has purchased JM Financial’s stake in Sona BLW and further invested primary capital in Sona BLW to combine it with Comstar, creating the new combined platform - Sona Comstar.
Sunjay Kapur, CEO, Sona BLW, will be the Chairman of Sona Comstar and any other businesses that will be acquired or developed under this platform.
Commenting on the development, Kapur said: “I am delighted to partner with Blackstone and Comstar to create Sona Comstar. This transaction marks the amalgamation of mechanical and electrical capabilities of two world-class companies. We will now offer our customers integrated technology products and solutions for hybrid, EV as well as conventional powertrains. With our EV- focused automotive technology platform, we will cater to the future of the automotive industry. Sona Comstar will be amongst the largest auto component companies of the country.”
Amit Dixit, Senior Managing Director and Head of Blackstone India, said, “The Indian automotive components space is attractive, both with India as a manufacturing hub for exports and as a domestic market. Sona has exceptional engineering capabilities, deep customer relationships, and a strong management team that has helped sustain its leadership position. The combination of Sona and Comstar is highly synergistic. There are opportunities to add on to this buy-and-build platform in this fragmented sector, especially in the current environment.”
What will be the synergies between Sona and Comstar?
The new technology platform allows Sona to expand its geographical footprint to China, US, Mexico and South India, while Comstar gets access to North and West India and European markets. Also, with Sona and Comstar having almost no overlap in customers, it enables both companies to benefit from being able to offer their products to each other’s customers. The combined entity serves most major OEMs across the passenger vehicle, commercial vehicle and off- highway vehicle markets in the USA, Europe, India and China.
The transaction also enables the companies to combine their R&D efforts and create a joint technology roadmap and solutions. It has enabled the creation of an 'Integrated Electric Drive Unit' to power the drivetrains of electric vehicles. The technology brings together three different fields of engineering -- materials, mechanical and electrical -- to make products to power the future of mobility.