Motherson Sumi Systems Limited (MSSL) on Friday announced the acquisition of a majority stake in CIM Tools. This acquisition will mark MSSL’s entry into the aerospace industry.
MSSL will acquire 55% stake from the promoters of CIM Tools (CIM). CIM, in turn, will hold 83% in Aero Treatment Private Limited (ATPL) and currently holds 49.99% in Lauak CIM Aerospace (JV with Lauak International, LCA). CIM, ATPL and LCA are referred to as CIM Group.
The three founders, Srikanth GS, Umesh AS and Vishwanath Deshpande, will retain 45% stake in CIM and will continue to drive further growth, in partnership with MSSL. CIM has INR 15 billion ($ 200 million) cumulative booked business potential currently. It reported a consolidated proforma turnover of INR 2,031 million in FY20 and INR 1,296 million in FY21.
CIM is engaged in machining and sub-assembly of components for the aerospace industry. ATPL is a vertically integrated unit engaged in surface treatment of machined parts, and LCA is engaged in hard metal machining.
MSSL’s entry into the aerospace segment is aligned with its growth strategy to venture into the non-automotive sectors as outlined in its five-year plan, Vision 2025. The transaction will provide MSSL access to a pedigreed customer base across the aerospace components supply chain along with specialised machining, treatment, and sub-assembly capabilities.
The proposed transaction is expected to be closed within three months, subject to receipt of necessary approvals.
Vivek Chaand Sehgal, Chairman, Motherson, said, “This acquisition is our first significant step towards growth in aerospace business. This is in line with our diversification strategy and will help us in strengthening our non-automotive business. This will be the 27th acquisition by Motherson, and we will continue to work towards adding more customers and products while serving diverse industries globally.”
The Promoters of CIM said, 'Both companies are aligned in their business objectives, vision, and philosophies. Together with the support of Motherson and established credentials of CIM Tools, we are confident that we will be able to offer a wider set of solutions to our customers, thus enhancing value for all stakeholders.”