Samvardhana Motherson to acquire Cirma Entreprise SAS!

Samvardhana Motherson International Limited (SAMIL), a leading global automotive supplier, has announced that it has signed a binding undertaking to acquire a 100% stake in Cirma Entreprise SAS, a French company that specializes in the manufacturing and sale of electrical wiring and interconnect systems (EWIS) for the aerospace, shipbuilding, and allied industries. 

Objects and effects of acquisition are: 

• Motherson to become Tier 1 to Aerospace OEM and proximity to OEM to open further avenues for growth. 
• Diversification to Electrical Wiring and Interconnect Systems (EWIS) for Aerospace, shipbuilding and other allied Industries from an existing portfolio of aero structure component, machining etc 
• Aligned with growth strategy and synergistic with existing wiring harness capabilities of Motherson 
• This transaction will also help Motherson in gaining access to the shipbuilding and allied Industries. 

A transaction is set to take place, subject to the completion of a consultation process with the French employees’ representative body and the satisfactory completion of all condition’s precedent. The expected timeframe for the transaction to close is within a period of 6 months from the date of signing, specifically between October and December 2023.  

The enterprise value of the transaction is 7.2 million euros. The equity value will be determined by adjusting the enterprise value for cash, cash equivalents, debt, debt-like items, and normalized working capital. The implied EV/EBITDA (Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization) multiple based on the EBITDA for the year 2022 is 7.3x.  

Samvardhana Motherson International Limited (SAMIL) via its wholly owned subsidiary, Samvardhana Motherson Automotive Systems Group BV (SMRPBV), or through one of SMRPBV’s wholly owned European subsidiaries, to acquire 100% of the shareholding in the target. 

Today, the stock opened at Rs 82.92 and it closed at Rs 82.16, down by 1.11%. Company is trading around 52-week high of Rs 91.68 and it has a 52-week low of Rs 61.84. It has a company has a market cap of around Rs 55,600 crore