Renold Acquired LGB
UK-based Automotive engineering major Renold Plc acquired 75 per cent stake in Coimbatore-based auto-parts maker, LG Balakrishnan & Bros (LGB) in its industrial chain business. The remaining 25 per cent stake in the business would be retained by LGB. The initial consideration payable by Renold is around Rs 48 crore, subject to adjustment through completion of accounts, LGB today informed BSE. The actual consideration is to be calculated as multiple of EBDITA for the two years ending on March 31,2009. The minimum consideration is around Rs 55 crore and maximum consideration is around Rs 72 crore.LGB would provide an established manufacturing base and sales distribution network. "This network would enable Renold to promote its existing product range in India's rapidly growing market." The products manufactured in India through the JV is expected to sold in about 90 countries. Renold and its group companies may outsource products from parent company and discussion on this have also been positive on this regard, added the LGB filing. LG Balakrishnan & Bros reported a drop in standalone net profit for the fourth quarter ended March 2008, due to substantial fall in operating margin. During the quarter, the profit of the company declined 67.62 per cent to Rs 4 crore from Rs 12 crore in the same quarter, previous year.
