Bengaluru-based Suprajit Engineering announced that it has acquired the light duty cable (LDC) business unit from Kongsberg Automotive ASA. The unit which has a diverse manufacturing footprint supplies its products to the automotive, non-automotive and two-wheeler segments. According to an investor presentation, the enterprise value of this transaction was $ 42 million.
Suprajit Engineering said the acquisition is “transformative” and would add over $100 million in revenue with double digit Ebitda in the next two years. The buyout expands Suprajit’s automotive footprint in Americas and Europe while improving its position as the leader in non-automotive and off-Highway controls in both geographies. Ajith Rai, Founder and Chairman of Suprajit, said, “We will have the capability to emerge as a `one- stop shop for cables’ globally.”
Jim Ryan, Suprajit’s president for global operations will lead the acquired entities in addition to his current responsibilities at Wescon Controls LLC (USA) and Suprajit Europe Ltd.
With the buyout, Suprajit will add three manufacturing plants to its global footprint including plants at Matamoros, Mexico, Siofok, Hungary and Shanghai, China. The acquisition also gives Suprajit a technology centre at Novi, Detroit and a distribution centre in Brownsville, also in the US. The transaction also involves the transfer of global sales and engineering expertise related to the LDC business located in the US, Germany, France, Sweden, and the UK. With a current installed capacity of the LDC division at 106 million cables per annum, the acquisition will enhance group’s cable installed capacity will increase to over 400 million cables per year.
LDC’s Shanghai Lonestar plant, considered a reputed cable business in China will give Suprajit a new manufacturing location and the EMA will become a new product segment to Suprajit. The LDC business which employs 1300 had sales if $ 85 million in calendar year 2021 .
According to the presentation, the LDC has several global customers including Tesla, Fiat (now part of Stellantis), Land Rover, Mercedes, Honda, Shiroki, Adient, Husqvarna, Lear, Magna, among others. The company’s products are on several global platforms including EVs. LDC’s exposure improves Suprajit’s diversification and lowers its dependence on the two-wheeler segment from 33 percent to 25 percent.