Motherson acquires French component maker Reydel for $201 million

Country’s largest auto component player, Motherson Sumi will invest $201 million to acquire Reydel Automotive Group (Reydel), a manufacturer of interior components and modules for global automakers. This will be the twenty-first acquisition for Motherson. 

Reydel, a French company, clocked revenues of about $1 billion with an EBITDA of $68 million (provisional, and in accordance with US GAAP) for the year ended December 31, 2017. This acquisition will expand Motherson’s revenue by at least $1 billion, taking it closer to its stated target of $18 billion by FY2020. It has reported revenues of Rs 405 billion for the nine months ended December 31, 2017 ($6.2 billion approximately). 

Vaman Sehgal, vice chairman at Motherson said the company has been negotiating this deal for a year and has managed to close it at an attractive valuation. “It complements our current product line up and helps us enter new countries like Argentina and Croatia,” he said.

Reydel has twenty plants spread in sixteen countries and counts Renault, PSA, Volkswagen, GM and Mahindra in its list of customers. It has 5,650 employees. Motherson, Sehgal said, has also achieved its stated goal of having not more than 15 per cent of the consolidated turnover from one country, customer or component. 

The acquisition would enable both the companies to capitalise on new opportunities in their existing and new geographies, as well as within each other’s customer portfolios. The acquisition will be done by Motherson’s step down subsidiary Samvardhana Motherson Automotive Systems Group B.V. (SMRPBV) using its cash and banking limits. The acquisition will be closed over the next three-four months.