Remsons Industries Ltd. (Remsons), a leading automotive components manufacturer, completed acquisition of the business of Magal Cables Ltd. (MCL), UK, part of Arlington Group – Engineering Systems. The cost of acquisition including working capital is GBP 3.5 million pounds. The entire transaction has been funded by a mix of internal accruals and debt without any equity dilution in Remsons. This acquisition is a step towards forward integration to create value for all the stakeholders.
Remsons and the administrators of Arlington Group have completed the acquisition on October 21, 2020. The acquisition has been done through the newly incorporated wholly owned subsidiary Remsons Holdings Ltd. (incorporated in the United Kingdom). Remsons is a pioneer in India for auto control cables & gear shifters with push pull cables is spread over 6 locations employing over 900 people. The company with a passion for customer satisfaction, technology innovation, deep industry and business process expertise and a collaborative workforce that embodies the future of work is growing steadily.
Commenting on the transaction, Krishna Kejriwal, Chairman & Managing Director of Remsons, said: “Remsons is taking a quantum leap by acquiring Magal Cables Ltd. We have been working with MCL for over 10 years and this acquisition would provide a vertical integration. We are turning a new chapter of growth for all our stakeholders which will give us access to global OEMs and markets. Our in-house team in tandem with existing Magal Cables team will create new avenues for our long-term OEM partners and will further bring in efficiency and design excellence. Despite the demand disruptions in our domestic automotive market and the global pandemic of COVID-19, Remsons’ revenues have grown by 10% CAGR in past 2 years. This acquisition will give further stimulus to growth.
Magal Cables has its manufacturing facility at Stourport near Birmingham with state-of-art Technical Center, Testing and Validation Laboratory. The company is into manufacturing of control cable assemblies, pedal box systems, spare wheel winches and Jacks which are supplied to prestigious customers like Ford, JLR, Daimler, Renault, Volvo and many more across the globe including UK, Europe, USA. In the financial year ended March 31, 2020, MCL achieved a standalone revenue of GBP 8.6 million with EBITDA of 15%.
Arlington Group consists of many entities and operates three key business unit: (i) Thermal Management, (ii) Engineering Systems, and (iii) Thermostatic Elements. The group had entered administration in May 2020 due to financial constraints, however, Magal Cables was one of the few profit-making entities within the group.
Amit Srivastava, Group CEO at Remsons, said: “This acquisition is an incredible milestone for our business which will help Remsons turn a new chapter in its growth endeavors. It gives us a complimentary manufacturing footprint with technological advancement and closer access to our clients in Europe. Now a wide array of world class range of products can be offered under one roof.
For our shareholders, Remsons moves towards a truly global revenue profile and expansion in margins due to synergy benefits of this acquisition. A closer integration with a marquee Global OEM supplier like Magal Cables augers well for all stakeholders in true sense. Overall, exciting times and we, at Remsons are geared up for this journey.”
KDA Corporate Advisors LLP, part of Kanu Doshi Group, were advisors to Remsons for the transaction. DBS Law were the legal advisors for the transaction. Ankit Jain, Partner – M&A, KDA Corporate Advisors, said: “This is a marquee transaction in these challenging times. Given the Covid restrictions all around, both in India and the UK, it is an extraordinary achievement. The transaction team at Remsons and KDA worked relentlessly to ensure the critical timelines were met given this was not an ordinary M&A, rather an administrator led sale. We wish Remsons all the best in their endeavor and look to advise them on many such transactions.”