Tega Industries set to acquire McNally Sayaji Engineering Limited

Tega has announced that the Honorable National Company Law Tribunal (NCLT) has approved its Resolution Plan for the acquisition of McNally Sayaji Engineering Limited (MSEL), as per the order dated 24th of February 2023. This acquisition by Tega represents a decisive initiative towards long-term portfolio (products and services) expansion. This wider portfolio is expected to enhance the Company's sustainability. The acquisition is expected to be completed over the next two months. The financing for the acquisition will be through an optimal mix of internal resources and debt. Once completed, this will be Tega's first acquisition in India and fourth worldwide.

We are excited to bring together the expertise and resources of our two companies to create new opportunities for growth and success. Tega has a strong presence in the global mining and minerals sector and has been growing sustainably. The Company is seeking to expand its product offerings to grow its business globally and in India. This acquisition is expected to enhance value for the Company and its shareholders, marked by revenue growth and margin expansion opportunities in medium term.

Tega Industries Limited (Tega / the "Company") is a global leader in designing and manufacturing 'critical-to-operate' consumables for the mining, mineral processing, and material handling industries.

MSEL, known for manufacture and sales of crushing, screening, grinding, material handling, and mineral processing equipment, is a prominent 'value player' in the competitive Indian market. Tega's market leadership and its marquee customer relationships are expected to increase MSEL's global footprint.

Rationale for acquisition

This acquisition is directed to holistic value-creation for all stakeholders. It shall be a transformational journey for Tega, from being a global leader in design and manufacturing 'critical-to-operate' consumables to becoming a leading player in manufacturing innovative and sustainable mineral processing equipment.

It is expected that the acquisition shall enhance Tega's overall sustainability. The value addition available to Tega from the acquisition is expected to enhance margins, which could translate into enhanced market share and profitability.

This acquisition is expected to position Tega among the most integrated global companies in its space, strengthening its brand and visibility as a global solutions provider.

Commenting on the acquisition, Mr. Mehul Mohanka, Managing Director & Group CEO said "The global market for mining and mineral products is increasingly competitive, putting a premium on the need to moderate costs and enhance margins. The acquisition of MSEL represents a win-win proposition for Tega and its customers. The acquisition of a complementary business is expected to enhance our competitiveness on the one hand and strengthen customer service on the other. We believe that the acquisition will enhance value for all our stakeholders. In doing so, we expect to engineer flawless solutions which benefit our customers in terms of driving operational efficiency at a lower cost of ownership.

The Tega-MSEL combination will enhance synergies related to shared technology, technical knowledge, larger product profile, after-sales service, and efficient working capital management. Besides, the acquisition is likely to translate into quicker growth, improved capital access, and attractive long-term value-creation for our stakeholders."

Shares of Tega Industries Ltd was last trading in BSE at Rs. 643.00 as compared to the previous close of Rs. 638.10. The total number of shares traded during the day was 6293 in over 825 trades.

The stock hit an intraday high of Rs. 649.00 and intraday low of 635.45. The net turnover during the day was Rs. 4034737.00.

Source : Equity Bulls

Keywords

TegaIndustries Acquisition NCLT Approval ResolutionPlan McNallySayajiEngineering