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Craftsman Automation Ltd’s Strategic Acquisition of Sunbeam Lightweighting Solutions

25 June 20243 mins read by Angel One
Craftsman Automation Ltd plans to acquire Sunbeam Lightweighting Solutions as part of a strategic move to enhance its capabilities and market position.
Craftsman Automation Ltd’s Strategic Acquisition of Sunbeam Lightweighting Solutions
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Craftsman Automation Ltd disclosed on June 24, 2024, that it has initiated steps towards acquiring Sunbeam Lightweighting Solutions Private Limited (Sunbeam) in a Memorandum of Understanding (MoU) signed with Sunbeam and Kedaara Capital Fund II LLP (Kedaara). The proposed transaction involves the acquisition of either the entire business or a portion thereof of Sunbeam, excluding specified assets located in Gurugram, to be executed in multiple phases.

The company aims to leverage Sunbeam’s capabilities and market position to strengthen its portfolio and operational capabilities.

The company stated that, however, the completion of the transaction is contingent upon several conditions, including conducting due diligence, obtaining final approval from Craftsman Automation’s Board of Directors, executing definitive agreements, and fulfilling other customary legal requirements.

Craftsman Automation anticipates significant synergies from this acquisition, particularly in enhancing its product offerings. By integrating Sunbeam’s business, Craftsman Automation aims to capitalise on emerging opportunities in the automotive and industrial sectors, driven by the increasing demand for lightweight and energy-efficient solutions.

The MoU underscores Craftsman Automation’s strategic intent to consolidate its position as a leading player in the manufacturing and engineering solutions space. The company remains committed to executing the proposed transaction diligently, ensuring compliance with regulatory norms and maximising value for its stakeholders.

Craftsman Automation will provide further updates as the transaction progresses, adhering to the disclosure requirements stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Earlier this year, in May, Craftsman Automation Ltd signed a definitive agreement for acquiring the residual 24% stake in DR Axion India Private Limited (DRAIPL), subject to the terms and conditions mentioned in the agreement to acquire such stake. The company mentioned that upon completion of the transaction, DRAIPL will be a wholly-owned subsidiary of Craftsman Automation Ltd. DRAIPL specialises in manufacturing aluminium cylinder heads and blocks, which are crucial automotive components used in passenger vehicles. These components are produced using gravity and low-pressure die-casting techniques at DRAIPL’s sole manufacturing facility located in Chennai.

About Craftsman Automation Ltd

Craftsman Automation Ltd specialises in producing numerous components and sub-assemblies tailored to client specifications in the automotive, industrial, and engineering sectors through supply and job-work arrangements. Headquartered in Coimbatore, Craftsman Automation operates 12 facilities, including 10 satellite units spread across India.

On June 25, 2024, the share price of Craftsman Automation Ltd opened at ₹4,949.00, touching the day’s high at ₹5,439.95, as of 12:53 PM on the NSE.

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.

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