The Board of Minda Industries Ltd. (MIL), flagship company of UNO MINDA, a leading Tier-1 automotive systems manufacturer has approved the proposed merger of Harita Seating Systems Ltd. (HSSL) with MIL.
The merger has potential to create significant shareholder value backed by superior business profile and performance. The transaction encompasses merger of HSSL into MIL; and its 51% holding in Harita Fehrer Ltd. (HFRL) which is a joint venture with Fehrer Automotive GmbH, one of the leaders in automotive seating business in Germany, Europe. HSSL along with its subsidiary has 12 manufacturing plants at strategic locations across India.
HSSL is engaged in manufacturing, product development and sales of safe, ergonomic and reliable driver seats and bus passenger seats. HSSL is a tier-1 seat supplier across various automotive segments. Their key customers include TVS, Royal Enfield, TAFE, Daimler, John Deere and TATA’s among others. HSSL recorded a consolidated turnover of Rs. 905 crores, EBITDA of Rs. 87 crores and PAT (after Minority Interest) of Rs. 38 crores for the financial year 2017-18.
Sharing his views on the development, Mr. Nirmal K. Minda, Chairman & Managing Director, said: “This merger is an important milestone for UNO MINDA. This is the largest M&A transaction that UNO MINDA has undertaken. HSSL is a quality focused, system driven organization and we are sure we will be able to take the business to the next level and create value for shareholders of both the companies.”
Mr. H. Lakshmanan, Chairman, HSSL, said: “We are extremely delighted to join hands with UNO MINDA Group, a leading Tier -1 automotive system manufacturer and I am sure business will achieve greater heights. I am confident, our amalgamation, will offer immense opportunity to broaden our portfolio and invest in products that we believe are most relevant to customers.”
Boards of both the companies have approved the following exchange ratios based on the recommendations of the Joint Independent valuers as below:
- 152 fully paid equity share (s) of Rs. 2 each of MIL for every 100 fully paid up equity share (s) of Rs. 10 each held in HSSL; or
- 4 fully paid up Non-Convertible Redeemable Preference Share(s) of Rs. 100 each at a premium of Rs. 21.25 per Non-Convertible Redeemable Preference Share of MIL for every fully paid equity share(s) of Rs. 10 held in HSSL
Proposed value to be created by the merger for different stakeholders:
- Product Synergies: MIL will diversify its product offering and help leverage the deep R&D capabilities to ensure a robust pipeline of new product launches & improve realisation per vehicle (kit value) across all segments. Improve revenue mix in CV segment
- Customer Synergies: It will help leverage the long standing and entrenched customer/OEMs relationships of group providing access to new/complementary customers.
- Technology: Work with Technology Partner (Fehrer, Germany) to develop and grow PV and other segments
- Sales Channel Synergies: Leverage upon strong aftermarket distribution channel of UNO MINDA to augment growth further
- Value Accretive: The Transaction is EPS accretive to shareholders of MIL