Suprajit Engineering buys out partner for Rs 25 crore

Bangalore-based auto components manufacturer Suprajit Engineering has acquired the business of CTP Gills Cables, a Birmingham-based automotive cable manufacturer, from Carclo Plc in Britain.

The company is also expected to acquire the rest 50 per cent stake held by Carclo in the Indian joint venture, CTP Suprajit Automotive Private Ltd, set up as a l00 per cent export-oriented unit (EoU).

The total consideration for the twin acquisitions is around Rs 25 crore. The acquisition was a significant step in the company's globalisation strategy, giving it a good foothold in Europe, said Ajit Kumar Rai, managing director of the company.

The company's consolidated revenues and profitability will double by March 2008 through these acquisitions and domestic growth from its present turnover (unaudited) of around Rs 136 crore achieved during 2005-06.

CTP Suprajit Automotive is a 50:50 joint venture between Carclo and Suprajit Engineering. This 100 per cent export-oriented unit recently started the manufacture of cables for the European Union in collaboration with CTP Gills Cables. Gills will outsource a significant portion of their present requirement of cables to the Indian joint venture.

The company has also incorporated a l00 per cent owned subsidiary in UK "� Gills Cables Limited. Gills Cables will acquire the assets and business of CTP Gills Cables.

On completion of the transactions, the company will have two 100 per cent owned subsidiaries "� one in India, to manufacture cables exclusively for exports to Europe initially and the other in UK, which will own the assets and business of CTP Gills Cables, said Rai.

Gills Cables will act as a major technology centre for the global activities of the company and handle most logistics for the European activities. It will maintain a manufacturing base in the UK for specialty and low volume cables. The Indian subsidiary will produce bulk volume export cables.

The EoU, when fully-owned by the company, will act as its global hub for exports not only to Europe, but also to other regions. The twin acquisitions will bring significant synergies to the company in terms of its manufacturing activities, technical competence, warehousing and logistic capabilities. The company would also acquire global reach through its UK and Indian subsidiaries, said Rai.