Swiss Firm Saurer Buys Multi-Arc Us Parent Stake

Textile machinery maker Saurer AG of Switzerland has acquired the US-based Multi-Arc Inc's stake in Multi-Arc India (MAL). The US-company had a 20 per cent stake in the local venture.

The deal comes close on the heels of Saurer's 100 per cent acquisition of Multi-Arc Inc which had a technical and financial collaboration with Multi-Arc India. Co-promoted by the city-based Jani family and Multi-Arc of the US, Multi Arc India had a 1997-98 turnover of Rs 15 crore. The company manufactures tools and decorative coatings for automotive and the watch industries.

Ashok K Jani, managing director, MAL said "Saurer plans to increase its stake in the Indian venture to 30 per cent on par with that of the local promoters."

 

"Saurer has shown a keen interest in the Indian venture. Modalities to increase the stake have not been decided but are expected to be finalised in the current year," he added.

Saurer's acquisition of the US company took place only after MAL sold a portion of its stake in Multi-Arc US to the Swiss firm enabling it to increase its stake to 100 per cent. In 1996, Saurer had taken a controlling stake in the US venture by acquiring the stake of the earlier promoter, Andal Corp of US. Saurer's main objective in acquiring the controlling stake was to aggressively grow in the thin film coating activities. In 1996-97, MAL had invested Rs 1.78 crore in the form of equity shares and convertible debentures in Multi Arc of the US.

Jani said the stake was divested for Rs 2.42 crore, a return of over 35 per cent. The performance of the tool coating segment in the current fiscal has been partially affected due to the recession. However, this has been compensated by a better performance from the decorative coating and ion-nitriding segments.

MAL is venturing into the overseas market to overcome the current domestic recession. The company has been instrumental in the setting up of a coating centre in Malaysia and is also providing technological inputs, hardware and software training and marketing strategies to it's networking members at Singapore and Malaysia.