Tega Industries (TEGA) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Molycop, a global leader in grinding media, aims to create a top-tier mining consumables provider with a complementary product portfolio and global reach.

• The deal leverages Tega's polymer mill liners and Molycop's grinding media to offer complete mill optimization solutions.

• Molycop's established presence in over 400 mines across 40 countries enhances market access and customer proximity.

• The partnership with Apollo Funds provides strong financial backing and expertise for growth.

• The acquisition is expected to strengthen leadership in mining consumables and drive innovation through joint R&D.

Financial terms and conditions

• Transaction valued at approximately $1.48 billion, expected to close by December 2025 or early January 2026, subject to regulatory approvals.

• Funding includes $248 million in equity (preferential allotment and QIP), $112 million in debt, and a deferred contingent liability of $120 million tied to mine reopenings.

• Promoter family to infuse INR 150-200 crores via preferential allotment.

• Apollo Funds to co-invest, with equity infusion and preferential shares, reducing Molycop's debt from $1 billion to $780 million.

• Molycop's current debt will be refinanced, with an expected 20-30 bps reduction in interest rate.

Synergies and expected cost savings

• Revenue and cost synergies expected, especially in SG&A and procurement, with $20 million EBITDA-level synergies by year two, scaling to $30 million annually from year four.

• Relocation of headquarters and establishment of global capability centers to yield $12 million in annual savings.

• Margin expansion targeted from 11.5% to 15% in two years, and up to 16-17% by year five.

• No additional fixed costs anticipated, with economies of scale and operational efficiency driving improvements.