Motherson inks deal to acquire Reydel Automotive Group for USD 201 mn

Motherson Sumi Systems Limited (MSSL), flagship company of the Samvardhana Motherson Group (SMG), through its step down subsidiary Samvardhana Motherson Automotive Systems Group B.V. (SMRP BV), on Tuesday announced the proposed acquisition of Reydel Automotive Group (Reydel), a privately held portfolio company of Cerberus Capital Management, L.P. (Cerberus) for USD 201 million.

This would be the 21st acquisition from the Samvardhana Motherson Group and is intended to further bolster Motherson's offerings in the automotive Interiors space.

"We are very excited about this partnership. It brings us closer to meeting our 2020 targets and helps us achieve '3CX 15', our strategy to not have any component, customer or country contributing more than 15 percent to our business," said Vivek Chaand Sehgal, chairman, Samvardhana Motherson Group.

"We are proud to have contributed to Reydel's significant accomplishments in recent years. Following a successful carve-out from Visteon, we partnered with the business to develop a high-performing and focused management team that was able to vastly improve financial performance. Since our acquisition in 2014, Reydel's EBITDA has transformed from USD (16) million in 2013 to USD 68 million in 2017. Samvardhana Motherson Group is a world class company, and this transaction would fulfill one of our key objectives, which is to position the business with a leading entity that will take Reydel to an even higher level of performance and success," said Dev Kapadia, senior managing director of Cerberus and co-chair of the Cerberus Private Equity Investment Committee.

Reydel's Interiors product portfolio include instrument panels, door panels, console modules, decorative parts and cockpit modules.

Reydel's global presence spans 20 plants and 16 countries, and is supported by a workforce of approximately 5,650 associates.

The acquisition would enable both companies to capitalise on new opportunities in their existing and new geographies, as well as within each others' customer portfolios.

Reydel's revenue for the year ended Dec 31, 2017 was USD 1,048 million and EBITDA was USD 68 million (provisional, and in accordance with US GAAP).

"The Cerberus team has been a great partner for Reydel during our efforts to improve our profitability and carve-out the business. We look forward to joining the Samvardhana Motherson Group, and this transaction would ensure that we will have excellent opportunities as part of one of the world's leading suppliers to the automotive industry," said Benoit Rolland, CEO, Reydel.

The transaction will be discussed with employee representatives and, subject to obtaining customary regulatory and other approvals, could close within the next four to six months.

The consideration is expected to be financed using existing cash and banking limits at SMRP BV.

Evercore acted as exclusive financial advisor to Cerberus and Reydel, and Linklaters LLP acted as legal advisor.

Meanwhile, Latham & Watkins acted as legal advisor to Motherson for the transaction and Norton Rose as legal advisor to Motherson for anti-trust related matters.