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| SMG acquires units of Yash Birla group firm for Rs 46 cr |
| Press Trust of India / New Delhi Aug 26, 2009, 16:37 IST |
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Diversified Samvardhana Motherson Group today said it has completed the acquisition of strategic business units of Yash Birla Group company Dagger Frost Tools for about Rs 46 crore.
The move would help Samvardhana Motherson Group (SMG) to expand its presence in the cutting tools business overseas.
"We have taken over the business units of Dagger Frost Tools Ltd (DFTL) for Rs 46.10 crore and formed a new entity under the name of Motherson Advanced Tooling Solutions (MATS)," SMG Chairman Vivek Chaand Sehgal said.
The acquisition has been carried out by SMG's holding company, Samvardhana Motherson Finance Ltd (SMFL). Though DFTL's businesses have been taken over, the company itself will remain with the Yash Birla Group.
The new entity — MATS — is expected to become a Rs 100 crore venture within the next two years and explore the auto component market in the US, Europe, Far East and South-East Asia.
Sehgal said the company is looking at utilising the potential of DFTL's expertise in design and manufacture of brooching and gear cutting tools, specially in the international market.
"DFTL's cutting tools business was of around Rs 40 crore and we hope to turn the new entity into a Rs 100 crore firm within two years," he said.
SMFL hopes to secure 60-65 per cent of MATS's revenue from exports within two years.
Along with the cutting tools business, the acquisition also brings DFTL's four plants in the country under MATS.
"We will augment capacity and further increase the level of automation in the plants at Aurangabad, Thane and Kandla," Sehgal said.
He, however, did not provide details regarding the plants' capacity or the planned investment in their upgradation.
"The cutting tools market is a very interesting category and a multi-million dollar global business. The acquisition will help us tap DFTL's expertise in the international market," Sehgal added.
SMFL is a Rs 7,000 crore business engaged in diverse fields including auto components, IT and software and polymers. Its metal division has a five per cent share in the total business.
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