Sandhar Tech buys Mag Engineering, deal size seen at Rs 70-90 crore

Mumbai: Sandhar Technologies Ltd, an affiliate of Rs 1,200 crore Sandhar Group, a diversified auto component major has acquired 100% stake in Bangalore based Mag Engineering Pvt. Ltd, one of the largest driver cabin manufacturer in the country.

The senior management of Sandhar Technologies were in Bangalore on Thursday to complete the acquisition process. ET learns the size of the acquisition is in the range of Rs 70-90 crore and Sandhar Technologies will fund this deal through debt and internal accruals.

People close to the development said, Maple Capital Advisors and Right Horizons were advisors to the transaction.

Mag specializes in supply of sheet metal components for construction and engineering industry.

When contacted Jayant Davar, vice chairman and managing director of Sandhar Group confirmed the acquisition but declined to give specific details of the deal.

Davar explaining the rationale of the acquisition said, "Mag is an established player in specialized fabrication business and this acquisition will help us consolidate our sheet metal, and fabrication businesses helping us expand further in niche products."

The acquisition will give Sandhar an opportunity to offer new products to its existing and new customers.

Founded in 1984, Mag Engineering has three manufacturing units in Bangalore which produces operator cabins, canopies, housings, panels, switchboards, control cabinets and all types of hi-precision sheet metal components. Its major customers are L&T Komatsu, Telcon, Caterpillar,Volvo Construction, Bharat Fritz Werner, Komatsu India, GE Healthcare, Faiveley Transport etc. It also exports to GE Medical and Caterpillar

"While Mag will continue to build stronger relationships with its own customers, the Sandhar umbrella will help it get scale, access to newer customers and corporate systems, leading to faster growth," added Davar.

Sandhar Group is an auto component major with diversified presence across 21 manufacturing units. It manufactures handles, latches, hinges, stamped & tubular components, plastic injected components, zinc & aluminum pressure die castings, moulds & dies and structural parts for Off Highway vehicles.

It also has a separate vertical which focuses on supplies of steel wheel rims & assemblies, handle bars, clutch and brake panels to the two wheeler manufacturers. Some of its major customers include auto majors like Hero MotoCorp, Honda Seil Cars, Tata Motors, TVS Motors, Ashok Leyland, GM, Mahindra Navister, Toyota, Volvo Eicher amongst others.