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Suprajit Engineering Limited Acquires Stahlschmidt Cable Systems

11 June 20243 mins read by Angel One
Suprajit Engineering Limited's acquisition of Stahlschmidt Cable Systems aims to bolster its European presence and broaden product offerings. It will strengthen Suprajit's global supply chain network.
Suprajit Engineering Limited Acquires Stahlschmidt Cable Systems
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On June 9, 2024, Suprajit Group announced that it is set to acquire Stahlschmidt Cable Systems (SCS), a German company, out of insolvency proceedings. This acquisition aims to bolster Suprajit’s presence in the European market and expand its product offerings in the automotive and industrial cable systems sector.

Suprajit’s acquisition of SCS includes purchasing assets and equity in Germany, Canada, China, Poland, and Morocco, necessitating new contracts with customers, vendors, and employees in certain instances. The workforce at the German headquarters will be reduced, but the remaining team will become an integral part of Suprajit. The acquisition involves a complex restructuring plan that will be implemented over the course of a year.

Stages Of the Acquisition

Suprajit’s acquisition of SCS will be completed in two stages. The first stage, involving the assets in Germany, Poland, and Morocco, is scheduled to close on July 1, 2024, contingent upon certain debt reductions, critical restructuring, and other conditions precedent. The second stage, covering assets in Canada and China, will be finalised a few months later, subject to specific restructuring conditions in those countries.

To facilitate this transaction, the acquisition will be executed through Suprajit USA Inc., with new entities incorporated in Canada and China, alongside the recently established Suprajit Germany GmbH.

Upon completion, SCS is expected to contribute €50 million in revenues and significantly enhance Suprajit’s global supply chain network. The total enterprise value of the acquisition is estimated at €13.5 million, with the equity value being adjusted for corporate debt and similar liabilities. The acquisition, dependent on substantial debt reduction as a condition precedent, will be entirely funded through internal accruals and existing cash reserves.

About Suprajit Engineering Limited

Suprajit Engineering Limited is India’s foremost manufacturer of automotive cables and halogen bulbs, boasting an annual global production capacity of 400 million cables and 110 million halogen bulbs. It offers a wide array of global automotive leaders, and its operations span four continents, encompassing numerous plants, technology centres, and warehouses.

On June 10, 2024, Suprajit Engineering share price opened at ₹484.00, touching the day’s high of ₹489.45 as of 11:21 AM 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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