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JK Tyre & Industries Limited (JK Tyre) and JK Asia Pacific Singapore Pte Limited, a wholly owned subsidiary of JK Tyre, have signed a binding term sheet with Kesoram Industries Limited (KIL) to acquire one hundred percent equity in Cavendish Industries Limited (CIL). CIL houses a Tyre Business Undertaking located at Laksar, Haridwar which manufactures a range of tyres, tubes and flaps.
JK Group has agreed for this acquisition at an enterprise value not exceeding INR 2200 crores, subject to conditions, wherein JK Tyre will hold the largest shareholding block and shall have substantial management control of CIL with an option to place upto 55% with its Associates/Group Companies.
The acquisition is proposed to be funded, by combination of debt and internal accruals raised by JK Tyre and other JK Group entities. The financial exposure of JK Tyre in the acquisition is expected to be of the order of INR 450 crores. The final transaction is expected to consummate over next few months (subject to various approvals) with definitive documentation expected to be executed between the Parties in due course of time.
Dr Raghupati Singhania, Chairman of JK Tyre, Said:
The acquisition will provide JK Tyre with further impetus towards ready expansion in the Truck & Bus Radials segment where it is a market leader as well as entry into the fast growing 2 / 3 Wheeler tyre market. Accordingly, JK Tyre estimates the transaction to be strategic, revenue accretive and synergistic with its existing tyre business.
News Source: JK Tyre Press Release
JK Group has agreed for this acquisition at an enterprise value not exceeding INR 2200 crores, subject to conditions, wherein JK Tyre will hold the largest shareholding block and shall have substantial management control of CIL with an option to place upto 55% with its Associates/Group Companies.
The acquisition is proposed to be funded, by combination of debt and internal accruals raised by JK Tyre and other JK Group entities. The financial exposure of JK Tyre in the acquisition is expected to be of the order of INR 450 crores. The final transaction is expected to consummate over next few months (subject to various approvals) with definitive documentation expected to be executed between the Parties in due course of time.
Dr Raghupati Singhania, Chairman of JK Tyre, Said:
The acquisition will provide JK Tyre with further impetus towards ready expansion in the Truck & Bus Radials segment where it is a market leader as well as entry into the fast growing 2 / 3 Wheeler tyre market. Accordingly, JK Tyre estimates the transaction to be strategic, revenue accretive and synergistic with its existing tyre business.
News Source: JK Tyre Press Release
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