Motherson Sumi Systems eyes Wilbur Ross company IAC for $800 mn buyout

Presently, 84% of MSSL's revenues come from overseas, with Germany being the biggest contributor.

Motherson Sumi Systems is in advance negotiations with billionaire investor Wilbur Ross to buy one of his portfolio companies International Automotive Components (IAC) Group for $750-800 million as the restructuring guru seeks to cash out of the low margins business following aborted attempts of an IPO,according to media reports.

Presently, 84% of MSSL's revenues come from overseas with Germany being the biggest contributor. The company aims to get 30% of its revenue from Americas alone in the next 5 years.

The company reportedly said the acquisition, if completed successfully, will help Vivek Chand Sehgal, co-founder and chairman of the Motherson Group diversify further into newer product categories in the auto interiors space and more importantly break into key markets like US where it has so far shopped only once - the wiring harness business of Stoneridge in 2014-15.

Stock view:

Motherson Sumi Systems Ltd ended at Rs. 223.2, down by Rs. 3.2 or 1.41% from its previous closing of Rs. 226.4 on the BSE.

The scrip opened at Rs. 226.1 and touched a high and low of Rs. 227 and Rs. 211.2 respectively. A total of 7460458(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 29526.66 crore.

The BSE group 'A' stock of face value Rs. 1 touched a 52 week high of Rs. 395.85 on 06-Aug-2015 and a 52 week low of Rs. 211.2 on 17-Feb-2016. Last one week high and low of the scrip stood at Rs. 245.9 and Rs. 211.2 respectively.

The promoters holding in the company stood at 65.61 % while Institutions and Non-Institutions held 23.38 % and 11.01 % respectively.

The stock traded above its 200 DMA.