Auto Component Manufacturer Craftsman To Acquire DRAIPL: Signed Definitive Agreement

Craftsman Automation Limited, a manufacturer of machined powertrain components, notified the market of significant business development on May 04, 2024. Coimbatore-headquartered Craftsman Automation Limited signed a definitive agreement to acquire the remaining 24% stake in DR Axion India Private Limited (DRAIPL). The acquisition is subject to the terms and conditions mentioned in the agreement. Craftsman acquired a 76% stake in DRAIPL in February, and as a result, DRAIPL became a subsidiary of Craftsman. After acquiring a 24% stake, DRAIPL will become a wholly-owned subsidiary of Craftsman.

Objective of Acquisition

• Craftsman and DRAIPL operate in the auto components space and have strengths in other ancillary areas.
• The company is seeking to solidify its presence in the passenger vehicle segment with the help of this acquisition. This transaction will provide process synergies, access DRAIPL’s customer base, and enter the passenger vehicle e-mobility solutions market.

Timeline and Cash Consideration

The said acquisition is likely to be finished by June 30, 2024, and Craftsman will pay a cash consideration of ₹250,00,00,000, subject to customary adjustments at Closing, if any.

“Further to our acquisition of 76% in DRAIPL in February 2023, Craftsman is consolidating its shareholding with further acquisition of the residual 24% stake in DRAIPL. While DR Axion Co Ltd, Korea, ceases to be an ultimate shareholder in the DRAIPL, it will continue to provide a technological collaboration for new products and technology development. We are excited to work with them in developing components for the Indian and global markets for existing and new customers,” said Mr Srinivasan Ravi, Chairman and Managing Director of Craftsman Automation Limited and DR Axion India Private Limited, India.

“DRAIPL will deliver products and services to its customers with the same high-quality standards of machine, men, material and method with the guidance and inputs from its parent, Craftsman and technological collaboration partner, DR Axion Co Ltd, Korea, for all new product development and technology absorption,” said Mr Kim Jong Seob, Joint Managing Director & CEO of DR Axion India Private Limited, India.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.