Varroc set to be India’s largest automotive lighting supplier with Visteon deal
The Aurangabad-based Tier 1 supplier VarrocGroup will acquire Visteon’s lighting business for $92 million in cash.
“It is a profitable business currently”, says Tarang Jain, MD, Varroc Group. This is the second acquisition by Varroc in the automotive lighting space in four months. It had acquired Italian two-wheeler lighting supplier Trion in December, 2011. The new acquisition brings advanced technologies such as LED headlamps,matrix LED lamps, adaptive high beams and advanced signal lighting to Varroc’s fold. That’s not all. It gets some prestigious clients like Ford, General Motors, Volkswagen, PSA Peugeot Citroen and Jaguar Land Rover. The deal also adds 5 plants (3 in the Czech Republic, 1 each in Mexico and India) to Varroc’s manufacturing footprint. The India business contributes around $15 million to Visteon’s lighting business.
Currently, 29 percent of Varroc’s turnover comes from its electrical vertical. With the Visteon lighting deal, the contribution of the electrical division will more than double to 62 percent. “This acquisition is a major step in our vision of achieving $4 billion revenues in 2020. Our annual revenues will be close to Rs 6,000 crore with this acquisition,”says Jain.
According to the company, the deal propels it to the top of the table of Indian automotive lighting manufacturers and to the bracket of the top three automotive component suppliers in India. Before signing the deal, Varroc was the seventh largest automotive supplier.
Varroc says that the deal will make it the only lighting supplier in India to have its own technology. Currently, 80 percent of Varroc’s turnover comes from two-wheeler cutomers.
The deal is a strategic fit for Varroc and a strategic move by Visteon also. “This transaction allows Visteon to focus on our core climate and electronics businesses and our joint venture relationships, which are positioned for profitable growth and market leadership,” said Donald J Stebbins, Visteon chairman, chief executive officer and president.
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