Samvardhana Motherson's latest acquisition brings it very close to car makers

The European Commission will have to provide merger control clearance for this transaction. Samvardhana Motherson will also need the approval of the national merger control authorities of China, Brazil, Mexico and the United States.

Funding of this transaction will take place through debt and internal accruals. Samvardhana Motherson CFO Kunal Malani said that the current net debt-to-EBITDA for the company stands at 1.8 times, which post the acquisition, may rise to 2 times.

SAS Autosystemtechnik GmbH is engaged in the development, engineering, manufacturing, testing, logistics, distribution and assembly of cockpits, consoles, door panels, headliner, rear hatches and other products. The entity had net revenue of 896 million Euros in Calendar year 2022.

Besides Germany, SAS Autosystemtechnik is present in 11 other countries globally, including Brazil, China and the United States.

Enhanced integration in the automotive supply chain, thereby increasing customer proximity

Product diversification across geographies with increased exposure to electric vehicle programs

To capitalise on emerging trends of outsourcing of module assembly by OEMs

Nearly half of the company's net revenue came from EV programs. The orders in hand that the company has are worth over 3 billion Euros in cumulative net revenue over the next three years.

The acquisition will transform the Motherson Group into a leading assembler of cockpits modules globally, with a special focus on EV modules.

This is Samvardhana Motherson's third acquisition in the last five months. In September last year, the company had announced its first acquisition in Japan - that of the mirror business of Ichikoh Industries at an enterprise value of 5.2 billion Japanese Yen. Last month, the company's board also approved the acquisition of 51 percent stake in Saddles International Automotive and Aviation Interiors Pvt. Ltd. for Rs 207 crore.

Sehgal also said that there are likely to be some more acquisition announcements before the end of the financial year on March 31.

Brokerage firm Jefferies believes that SAS is a decent-sized acquisition for Samvardhana Motherson and can, prima facie, add another 10-15 percent to the company's revenue and operating profit. It also called the transaction multiple of 5.3x CY22 EV/EBITDA as reasonable. The brokerage has a hold rating on the stock with a price target of Rs 70.

Do tune in to CNBC-TV18 for the management's commentary on their latest acquisition today at 9:50 AM.