SPR Auto Technologies (SHRIPISTON) M&A announcement summary

Deal rationale and strategic fit

• Acquisition of TGPEL enables diversification into non-ICE components and sectors beyond automotive, including electrical, consumer goods, and medical.

• TGPEL's advanced capabilities in high-precision injection molding align with the acquirer's strategy to strengthen its leadership in specialized lightweighting solutions.

• The deal complements a previous acquisition (Takahata), with minimal product overlap and some customer overlap, enhancing the overall product portfolio.

• The acquisition supports a long-term strategy to invest and grow in areas agnostic to ICE powertrain, cementing a leadership position in automotive and related sectors.

Financial terms and conditions

• SPR Engenious Limited will acquire 100% of TGPEL at an enterprise value of INR 2,200 million on a debt-free, cash-free basis, with adjustments for debt and debt-like items at closing.

• The acquisition involves purchasing shares from five investors, including Asahi India Glass Limited (30%), Padmini VNA Mechatronics Limited (30%), and three private investors (40% combined).

• Transaction expected to close by December 31, 2024, subject to completion of conditions precedent.

Synergies and expected cost savings

• Significant synergies anticipated from combining customer reach and leveraging both companies' strengths to drive new business.

• Minimal product overlap ensures complementary offerings, maximizing cross-selling opportunities and operational efficiencies.

• The acquisition is expected to be EPS accretive from day one and enhance consolidated EBITDA margins.