Suprajit Engineering announces acquisition of Stahlschmidt Cable Systems
Suprajit Engineering Limited, an Indian manufacturer specializing in automotive cables and halogen bulbs, has officially signed a Share and Asset Purchase Agreement (SAPA) to acquire the business of Stahlschmidt Cable Systems (SCS), a renowned Light Duty Cable manufacturer. This acquisition, valued at an enterprise value of €13.5 million, is part of a strategic move to expand Suprajit’s global footprint in the cable manufacturing sector.
Expansion of Global Manufacturing Capabilities
The acquisition of SCS, which has been under insolvency proceedings in Germany, includes significant assets and operations spread across Germany, Canada, China, Poland, and Morocco. This move is expected to add €50 million in revenues to Suprajit’s portfolio and significantly enhance its supply chain and manufacturing capabilities. The deal, complex in its structure, involves asset and equity purchases across multiple countries, requiring new contracts with customers, vendors, and employees. The transaction will be funded through internal accruals and cash on the balance sheet.
Strategic Integration and Restructuring
A critical component of this acquisition is the restructuring plan SCS is undergoing, which includes relocating manufacturing operations from Poland to Morocco—a process that has been completed with the Poland operations set to be shut down. The restructuring also involves a workforce reduction at SCS’s German headquarters, integrating the German team into Suprajit’s operations.
The completion of the acquisition is structured in two stages: the first involving operations in Germany, Poland, and Morocco, slated for completion by July 1, 2024, and the second stage involving Canada and China, pending certain restructuring conditions.
Leadership Insight
Ajith Rai, Founder and Chairman of Suprajit, emphasized the strategic importance of this acquisition, stating, “This acquisition will further strengthen our global Light Duty Cable manufacturing footprint. It will provide our customers with low-cost manufacturing bases and nearshoring capabilities, enhancing our customer-centric supply chain footprint.”
N.S. Mohan, Managing Director and Group CEO of Suprajit, also highlighted the confidence this transaction has garnered from major OEMs and Tier 1 vendors in Europe, acknowledging the strong support from customers, vendors, and the management of SCS.
Akhilesh Rai, Director and Chief Strategy Officer at Suprajit, commented on the industry’s challenges, noting, “The global automotive control cable industry is under considerable stress – but this acquisition brings us ideal locations to support our customer’s control cable and future actuator needs.”
Financial and Legal Advisory
Grant Thornton Bharat LLP, India, served as the sole financial advisors, and Oppenhoff & Partner, Germany, acted as the lead legal advisors for Suprajit in this significant transaction.
Suprajit Engineering Limited’s acquisition of Stahlschmidt Cable Systems not only marks a significant step in its expansion but also sets a strategic path for growth and improved customer service. With a robust plan for integration and restructuring, Suprajit is poised to leverage its enhanced capabilities to foster global growth and margin improvements over the medium term.