Motherson Sumi Systems buys stake in aerospace machining firm CIM Tools
Motherson Sumi Systems Limited (MSSL) said that it has acquired a 55% stake in CIM Tools Private Limited, a Bengaluru-based supplier in the aerospace supply chain.
The transaction marks the foray of the Indian automotive component manufacturer into the aerospace industry in line with its growth strategy to enter into the non-automotive sectors as outlined in its five-year plan dubbed Vision 2025.
Vivek Chaand Sehgal — Chairman of Motherson Sumi Systems 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.”
Motherson Sumi Systems did not reveal the financial terms of the deal.
The auto component manufacturer will acquire the stake from the promoters of CIM Tools.
In turn, CIM Tools will hold a stake of 83% in Aero Treatment Private Limited (ATPL) and presently has a stake of 49.99% in Lauak CIM Aerospace, which is a joint venture with Lauak International.
CIM Tools is involved in machining and sub-assembly of components for the aerospace sector. On the other hand, ATPL is a vertically integrated unit focused on surface treatment of machined parts, while Lauak CIM Aerospace is into hard metal machining.
CIM Tools’ three founders — Srikanth GS, Umesh AS, and Vishwanath Deshpande will retain the remaining 45% stake in the company.
Srikanth GS, Umesh AS, and Vishwanath Deshpande jointly stated: “We are delighted about the strategic partnership between CIM and Motherson. 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.”
The Bengaluru-based firm is said to have more than $200 million cumulative booked business potential as of now. Its consolidated turnover was INR 2.03 billion in FY20 and INR 1.3 billion in FY21.
Motherson Sumi Systems said that the deal will give it access to a pedigreed customer base in the aerospace components supply chain along with specialized machining, treatment, and sub-assembly capabilities.
The deal, which is subject to the necessary approvals, is likely to be finalized within three months.