Tega Industries (TEGA) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Molycop positions the combined entity as a global leader in mining consumables, offering a comprehensive product portfolio for mill optimization and process efficiency.

• Molycop's global footprint and customer base in over 40 countries complement the acquirer's reach, enabling deeper market penetration and customer engagement.

• The deal leverages Apollo Funds' financial strength and expertise, supporting growth and execution.

• Complementary product lines (polymer mill liners and grinding media) allow for cross-selling and enhanced value to customers.

• The acquisition is expected to drive innovation and joint R&D, expanding the technology and digital offerings.

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 $120 million deferred contingent liability tied to specific performance criteria.

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

• Apollo Funds to co-invest, with additional equity infusion to reduce Molycop's debt.

• Molycop's debt to be reduced from $1 billion to $780 million at deal close.

Synergies and expected cost savings

• Targeting $20 million in EBITDA-level synergies by year two, scaling to $30 million annually from year four.

• Cost savings from relocating headquarters ($7 million), SG&A rationalization (7%), procurement synergies, and global capability centers ($5 million annual savings).

• Margin expansion expected from 11.5% to 15% in two years, with further growth to 16-17% by year five.

• Technology and digital business expected to grow 25% annually, with higher margins than traditional products.