Greaves Cotton increases stake in Excel Controlinkage to 70%

Greaves Cotton has acquired an additional 10% stake in its material subsidiary Excel Controlinkage Private Limited, valued at Rs 62.38 crore, raising its total stake in the unit to approximately 70%. The transaction, executed via the secondary market, augments Greaves Cotton's share in the mechanical and electronic motion control segment.  

The company also provided insights into the timeline for completing the acquisition. The purchase of 60% of Excel Controlinkage's shareholding has a longstop date of April 30, 2023. Subsequent tranches of share purchases are planned annually, with the final tranche expected to be completed by August 2026.

In merger and acquisition transactions, a longstop date is one where parties agree on a time frame in which all the conditions precedent for a transaction, must be fulfilled, and the transaction completed. If the transaction remains incomplete at the end of this time, the agreement is either automatically terminated or one of the parties wins the right to withdraw.

According to the company's regulatory filing, Excel reported revenues of Rs 167 crore, Rs 120 crore, and Rs 105 crore for FY22, FY21, and FY20, respectively.

Greaves Cotton's management emphasised that this acquisition aligns with the company's strategic goal of diversifying its product offerings and strengthening its foothold in the commercial vehicles sector, with an eye on developing a comprehensive mobility ecosystem.

Founded in April 1994, Excel Controlinkage claims to be a key player in the motion control systems sector, with a strong market presence in manufacturing push-pull cables, levers, and sensors. The company is recognised as a leader in margins within the industry, thanks to its comprehensive product portfolio that includes heavy-duty push-pull cables, mechanical levers, and electronic throttle levers.

Excel serves a diverse range of sectors, including commercial vehicles, construction equipment, agriculture, material handling, marine, and special purpose vehicles (SPVs), supplying products to both OEMs and the aftermarket.

It also manufactures heavy-duty push-pull cables, producing everything from inner and outer conduits, to end fittings.