The said acquisition comes with strong customer support and the deal involves acquiring asset/equity purchases in Germany, Canada, China, Poland and Morocco. It requires some fresh contracts with customers, vendors, and employees.

Poland relocation is complete, and operations will be shut down. However, key employees will continue to support Morocco. At SCS's headquarters in Germany, there will be a reduction in workforce. The German team will form an integral part of Suprajit.

It also includes comprehensive one-year restructuring plan. The completion is expected to be in two stages. The first stage (Germany, Poland and Morocco) is expected to close on July 1st, 2024, subject to certain debt reduction, critical restructuring and other Condition Precedents (CPs). A few months later, the second stage (Canada and China) will also be completed, subject to certain restructuring CPs in Canada and China.

The acquisition will be done through Suprajit USA Inc. Suprajit will be incorporating companies in Canada and China, in addition to recently setup Suprajit Germany GmbH to consummate this transaction.

When completed SCS will add €50 million in revenues and will form a key part of our global supply chain footprint. The Enterprise Value of the acquisition is pegged at €13.5 million and equity value will be less after deducting corporate debt and debt like items

Ajith Rai, founder and chairman of Suprajit, said, “This acquisition will further strengthen our global Light Duty Cable manufacturing footprint. Suprajit will have enhanced ability to provide customers with low-cost manufacturing bases, nearshoring capabilities, and a perfect customer centric supply chain footprint. This acquisition, post its consolidation and restructuring, will yield improved customer service, global growth, and margin improvements, over the medium term.”

N.S. Mohan, managing director and Group CEO said, “This transaction reposes the trust and confidence in Suprajit as a global Cable manufacturer by the major OEMs and Tier 1 vendors in Europe. The acquisition comes with a sound backing by the customers, vendors, and the management of SCS who are committed in nursing back a company with 100-year-old history.”

Suprajit Engineering is engaged in the business of manufacturing of auto components consisting mainly of control cables, speedo cables, auto lamps and other components for automobiles and caters to both domestic and international markets.

The company’s consolidated net profit jumped 44.27% to Rs 59.15 crore on 12.03% increase in revenue from operations to Rs 783.12 crore in Q4 FY24 over Q4 FY23.

The counter rallied 2.73% to end at Rs 476.45 on Friday, 7 June 2024.