Craftsman Automation to Acquire Sunbeam Lightweighting Solutions for ₹376 Crore

On August 5, 2024, Craftsman Automation Limited announced its decision to acquire Sunbeam Lightweighting Solutions Private Limited (Sunbeam) through a securities subscription and purchase agreement (SSPA). This move follows an earlier stock exchange notification dated June 24, 2024, and is in compliance with Regulation 30 and other applicable regulations of the Securities and Exchange Board of India (SEBI) Listing Obligations and Disclosure Requirements Regulations, 2015.

The Board of Directors of Craftsman Automation Limited has authorised the company to enter into the SSPA with Sunbeam and Kedaara Capital Fund II LLP (Kedaara). The agreement involves acquiring 100% of the legal and beneficial interest in Sunbeam and subscribing to 37,60,00,000 optionally convertible debentures, each with a face value of ₹10. The SSPA was executed on August 5, 2024.

Completion of this proposed transaction is contingent upon several factors, including receiving necessary approvals outlined in the SSPA, such as the approval from the Competition Commission of India, and fulfilling other customary conditions required by law or contract. Once the transaction is finalised, Sunbeam will become a wholly-owned subsidiary of Craftsman Automation Limited.

Sunbeam specialises in the manufacture of aluminium products and operates five manufacturing facilities located in Gurugram, Tapukara, Halol, Ludhiana, and Bawal. Sunbeam is currently wholly owned by Kedaara Capital Fund II LLP. For the fiscal year 2022-23, Sunbeam reported a turnover of ₹1,601 crore.

Strategic Benefits of the Acquisition:

• Expanded Manufacturing Footprint: The acquisition significantly enhances Craftsman’s manufacturing presence in northern and western India and complements its planned greenfield expansion in Bhiwadi, Rajasthan.
• New Product Capabilities: The deal will introduce new product capabilities in the aluminium segment, broadening Craftsman’s product offerings.
• Increased Customer Base: The acquisition brings valuable customer relationships, including export customers in North America, expanding Craftsman’s market reach.
• Legal and Operational Steps: Post-acquisition, Sunbeam will address pending legal settlements with workmen at its Gurugram facility and will relocate identified movable assets, including plant and machinery, to be determined by Sunbeam’s management in agreement with Craftsman.

The companies aim to complete the transaction by September 30, 2024, with a long stop date of October 31, 2024, subject to regulatory approvals and satisfaction of other conditions in the SSPA. Craftsman Automation will invest a total of ₹376,00,00,001 to acquire Sunbeam’s securities and subscribe to the optionally convertible debentures. This acquisition will enable Craftsman to exercise full control over Sunbeam as a wholly-owned subsidiary.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.