Samvardhana Motherson announces cash-EPS accretive acquisition of Lumen Group for Euro 57 million

Indian Tier-1 major Samvardhana Motherson International (SAMIL) has announced a cash-EPS accretive acquisition of the Lumen Group, which is engaged in the design, manufacturing, and supply of OEM-certified automotive parts, accessories, and dealer-fit products, and has three manufacturing facilities across Australia, South Africa and Thailand. 

SAMIL's fully-owned subsidiary Samvardhana Motherson Automotive Systems Group (SMRP BV) will be the vehicle of this acquisition which is pegged at 57 million Euros (approximately Rs 500 crore). The company says that the move is another step towards its Vision 2025, and it maintains a positive view on the expected improvement in underlying industry, improving wallet share on large order books, especially for EVs, as well as other inorganic initiatives.

SMRP BV will acquire the Lumen Group at 57 million Euros, implying EV/S of 0.9x and EV/E of 6x. Target Group’s revenue stands at EUR65mn for the year ending June 2023. While the Group has reported a turnover of AUD 106.4 million (approximately Rs 526 crore) in FY23, its EBITDA margin stands at 13.7 percent.

The Lumen Group is engaged in the design, manufacturing and supply of OEM-certified automotive parts, accessories and dealer-fit products, and its product range includes accessories, trailer harnesses, lighting, electronics and safety systems. It has 3 manufacturing facilities across Australia, South Africa and Thailand.

SAMIL’s management expects synergies between the product range which presents an opportunity for cross-selling. Furthermore, it provides an opportunity to explore untapped business potential by upselling from its global locations to genuine accessories and dealer-fit segments. The Transaction for this acquisition is expected to be completed by Q4FY24.