Samvardhana Motherson International Ltd (SAMIL) has acquired a 100% stake in SAS Autosystemtechnik, a global provider of cockpit module assembly and logistics services to auto OEM. SAS has a diversified geographical and OEM exposure, and strong presence in premium vehicles. SAS can, prima facie, add 10-15% to SAMIL’s revenues and Ebitda. SAMIL expects to complete the acquisition by Q2FY24, subject to regulatory approvals.
In CY22, SAS generated net revenue of €896mn and Ebitda of €103mn, this is 10-15% of our FY23E consolidated revenue and Ebitda estimate for SAMIL. SAS gross revenues was €4.4bn in CY22. The company gets 32% of its revenues from a leading American EV OEM, 29% from Volkswagen, 12% from Skoda and 5-8% from Mercedes, Porsche and Audi each. About 50% of its net revenues come from EV programmes. SAS has a diversified geographical exposure and has more than 5K employees in over 24 manufacturing locations across 12 countries.
SAMIL has said that the acquisition will enable it to—increase customer proximity, add competency in assembly operations, automation and managing complex logistics, and increase exposure to EV programmes. It will also provide synergies as 20% of OEM nominated pass-through products at SAS consists of polymer modules, wiring harness and metal components. Moreover, 50% of the pass-through products at SAS consist of vehicle electronics; this offers new avenues to SMAIL for potential future growth. The transaction EV of €540mn implies 5.3x CY22 EV/Ebitda. This is a tad higher than the current trading multiples of European auto component firms such as Faurecia and Plastic Omnium; however, the
deal valuation still appears reasonable taking into account some control premium.