ET bureau

MUMBAI/NEW DELHI: Samvardhana Motherson Group’s flagship listed company Motherson Sumi Systems Limited (MSSL) Wilbur is in the company of billionaire investors. Ross Deeper talks could be one of the boldest bets. International Automotive Components (IAC) a group worth 7.5.5 $ 100 million restructuring specialists after a failed IPO attempt is looking to cash in on 8 $ 100 million from its low-margin business, multiple sources said.

The successful completion of the acquisition will help Vivek Chand Sehgal, co-founder and chairman of the Motherson Group, to move further into new product categories in the automotive interiors space and, more importantly, into key markets such as the US, where the group is based. To date, the 2014-15 Stonerid wire harness project has just been completed-sub-jointed. Currently, 84% of MSSL’s revenues come from abroad, with Germany being the largest contributor. The company aims to reach 30% of sales from the US within the next five years.

IAC is headquartered in Luxembourg is a global supplier to the automotive industry, with sales of nearly 60 last year $20 billion came from $2 billion 85 countries Instrument panels, cockpits, doors and trim, roof linings, and other exterior components are manufactured.

IAC failed to launch a planned $ billion initial public offering (IPO) in 2011 1.15 and delayed it again each year in 2013. European disruption. The company had planned to resume its initial public offering (IPO) last year, but failed to do so. Last August, Delphi appointed auto parts turnaround after restructuring Delphi. Robert “Steve” Miller is the new CEO. The most notable developments in Ross’ search for a partner were Bank of America Merrill Lynch and Jeffries. Subsequently, the company was authorized late last year to begin a formal sales process as part of a new strategy to revitalize the business or generate a return on investment.

MSSL is said to have emerged as the ultimate competitor, beating out a number of global acquirers and private equity buyout funds, the sources said, adding that they requested anonymity because the negotiations remain private. The two sides are currently engaged in exclusivity talks, the sources added. However, this has not been independently confirmed. MSSL is said to be simultaneously pursuing other international targets.

According to the sources, Motherson may utilize its European subsidiary Samvardhananan Motherson Automotive Systems Group B.V. (SMRP BV), based in the Netherlands, to achieve this goal.

Post the merger, MSSL has a net debt of Rs. 1891,5130 crore in cash Rs. 100 crore for the current financial year. The current market capitalization stands at Rs. 2952.323 crores.

An MSSL spokesperson declined to comment on the market speculation. Emails sent to IACC. and Wilbur Ross Co spokespersons were unanswered at the time of publication.

BUYOUT MACHINE The IACC was founded in 2006. w Ross private equity firm W Ross L.LLC Ross & Co. and investment fund manager Franklin Mutual Advisers LLC are already part of the interior design business of Lear Corp. and Collins Ackerman Co. Collins Aikman Corp. merged. The company continues to grow as Ross acquires other parts manufacturers around the world. Similar to Motherson’s strategy of inorganic growth through acquisition, IAC is an interior space integrator that has made 17 acquisitions since its inception. The company’s last acquisition was in 20137 when it acquired the South African joint venture IACC-Feltex (Pty) Ltd. a manufacturer of automotive flooring, audio and trim components. However, declining operating margins are a concern. Analysts familiar with the ongoing discussions say that IAC margins are 50% lower than peers and this is an opportunity for MSSL to wait for the company to maximize value and achieve a significant rise in EBITDA.

This remains the case despite short-term volatility in the stock. Due to lower sales and profit growth in the December quarter,-it is down 7.75% in the past one month, while the benchmark Sensex is down 3.35%.–MSSL has achieved significant growth over the last 15 years, achieved significant growth Annual sales and profit growth of 44%. 35% and 35% CAGR through a portfolio of greenfield projects and acquisitions (~12 per annum) respectively and a successful turnaround. Sehgal has set a blueprint for the entire Group with a sales target of US$5.01 billion by 2015: US$180 billion in sales over the next five years, with a ROCE of 40%. It is expected that $12.1 billion will come from organic growth and the rest from acquisitions.

“Matheson linked its 44%” profit to the Volkswagen Group. After the automotive giant was caught in an emissions software scandal that penalized its stock in the market this year, big bets like IAC allow the multinational OEM base to diversify. Mumbai FIII asked for anonymity Analysts say this will help the company.

To minimize business risks, the company is confident of following the 3C management to around 3CX10 per year by 2020. Last year, the company also secured around 1,540 from Daimler worth Rs 100 crore The largest order is expected to start deliveries in 2018 every year. To support Daimler’s expansion, MSSL has invested in two new plants, one in the US and the other in Hungary, and expanded its brownfield real estate capacity in Germany. A significant portion of the company’s new capital expenditures will come from the United States.

JM Financial analysts said on February 10, “We expect MSSL’s 2015-18 consolidated revenue CAGR to reach 32% for the fiscal year, driven by 16% revenue CAGR and 250 In basis point margin improvement. “We believe,” the report said, “that MSS provides strong revenue visibility through order book, which has exceeded €12.5 billion and continues to grow. In addition, capacity expansion will diversify revenues by contributing to market share growth, especially for BMW and Daimler. Elara Capital Jay analyst Kale added in a brokerage report2 this month. The company has exited the field while others have filled gaps in their product lineups, saving significant development costs. Johnson Controls Inc. sold its $3.01 billion subsidiary to Shanghai Yanfeng Automotive Trim Systems Co. The company exited the automotive business in 2014 after spinning off its interiors division into a joint venture. JCI holds a 30 percent stake. The supplier also said it is exploring the option of abandoning its seating business and exiting the automotive industry altogether due to the capital-intensive nature of the industry.