Scholz acquisition to boost margins, EPS: Amtek India.

Scholz is a leading high quality hot die forgings manufacturer for the auto and non-auto component industries.

Speaking about the recent German acquisition, Gautam Malhotra, MD, Amtek India in an interview to CNBC-TV18 said the new company will improve margins and would add to the company’s EPS from first year itself.

Amtek Auto has acquired German based Scholz Edelstahl GmbH through its 100% Singapore based subsidiary Amtek Precision Engineering PTE Limited.

Scholz is a leading high quality hot die forgings manufacturer for the auto and non-auto component industries. It is also engaged in the special steel trading business which will enable backward integration with all of Amtek Group's international business.

The acquisition would help the company by adding news clients, give forward and backward integration and also give trading advantages, said Malhotra.

The company has paid less that four times EV to EBITDA for the acquisition through a mixture of debt and equity, said Malhotra. The debt post the acquisition would to to 4.5-4.6 times net debt to EBITDA. The EBITDA of the new company is around 14-15 million euros, he added.

According to him there would not be real increase in the debt, only a small amount of Rs 200-300 crore would come in through this acquisition. The debt on the balance sheet for the company is about  Rs 15,500 crore.
 

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