Lumax Auto Technologies rose 3.73% to Rs 105.75 after the company announced acquisition of OK Play Group's roto molded plastic business.OK Play Group comprises of OK Play India and its wholly-owned subsidiary viz. OK Play Auto. The group is engaged in manufacture and sale of roto moulded automotive plastic components, plastic molded toys, playground equipment, plastic children's furniture and E-vehicles in India.
The board at its meeting held on Monday (24 February) approved the deal that will provide Lumax Auto Technologies (LATL) access to latest rota molding technologies, the company said. The deal will also enable LATL to exploit fast-emerging growth opportunities in the automotive rota molded plastic fuel tanks market for commercial vehicles, tractors and off-road vehicles in view of changing environment, it added.
The initial purchase consideration will be based on an enterprise value that will be EBITDA multiple of 5.67 times, to be applied on 3 years average EBITDA of 2017-18, 2018-19 and 2019-20 of the auto component business of OK Play, it said.
The auto component business of the OK group had a revenue of Rs 42.9 crore and EBITDA of Rs 9.6 crore in 2016-17, Rs 109.6 crore and Rs 34.1 crore, respectively, in 2017-18. The same for 2018-19 stood at Rs 125.8 crore and Rs 38.3 crore, respectively, it added.
The balance 10% consideration will be computed and paid based on six times of 2022-23 EBITDA of the acquired auto component business by 31 July 2023, subject to certain adjustments in accordance with definitive agreements to be entered into by the company.
Further, LATL, as part of the deal, it will provide a loan of Rs 20 crore to OK Play India (OKPI) on closing at simple interest of 12% per annum, to be repaid by OKPI along with interest, by 25 July 2023.
Lumax Auto Technologies is engaged in the manufacture of automotive parts like sheet metal parts, fabricated assemblies, tubular parts for two wheeler and three wheeler industries.
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