Autoline Industries to acquire 51% strategic Stake In Stokota NV, Belgium

Autoline Industries Ltd has announced that the Company and Stokota NV have entered into a Memorandum of Understanding to execute a merger of the two Companies where in the Company will acquire a 51% stake in Stokota's Global Operations for a consideration of approximately INR 66.8 Cr in cash and equity.

The Company is a Design Engineering Manufacturing solutions provider focused on sheet metal assemblies and formed tubular products, with integrated engineering, tool design and manufacturing facilities, in Pune, India.

Stokota NV is a world renowned MNC with operations in Belgium, France, Poland, China, and India. Stokota has partnerships in over 16 European Union and Eastern European countries, and has over the last 40+ years, established its brand worldwide as a leader in providing "Complete Road Transportation Solutions". Stokotas road transportation solutions cater to Building & Construction, Fuel & Energy, Waste & Cleaning, Agriculture & Food and On Site Logistics industry sectors.

The Company manufactures Special Purpose Vehicles including tippers, tipper trailers, flatbed and skeleton trailers, cement bulkers, fuel tankers, LPG tankers, bitumen tankers, chemical tankers, vacuum tanks, high pressure jetting units, road and urban sweepers, garbage handling systems and more.

Core to the Company's strength is its superior engineering and design capabilities and strong international manufacturing experience. Stokota's products are based on cutting edge technology and are recognized as industry leaders worldwide. Stokota is the largest manufacturer of Aluminum tankers in Europe and is a leader in the market for steel and stainless steel tankers. The Company also commands high market acceptance in tippers, tip trailers, trailers, bulkers, sophisticated jetting units and road sweepers. The Company is recognized as a reliable source of road transportation solutions for reputed OEMs and large fleet operators in Europe, China and South Fast Asia.

Stokota's current customers include end users of Volvo, Scania, MAN, Iveco, Renault, DAF in Europe and FAW and Deng Fong in China.

Objectives of the Merger

The potential investment by the Company is to help effect a merger of Stokota MV, Stokota China and Stokota India to integrate its global strategy, and form, with the Company, a conglomerate that will be a global leader in the manufacture of high-value, low cost automotive components and transportation solutions.

Key objectives include leveraging:

1. The Company's design talent to use the integrated Autoline - Stokota design operations as the group's global hub for Engineering Design and development

2. The competitive advantage that India has in high-quality low-cost manufacturing, by outsourcing production of assembly parts for Stokota to the Company's production centres and thus improve Stokota and the Company's profitability.

3. The integrated India operations to service the European, Middle-fast, African and central Asian markets, while focusing China operations to service the Americas and Australia

4. India's strength as an English speaking nation to outsource business processes such as sales support and customer inquiries.

5. India's mature and growing financial markets to raise funds for strategic expansions and acquisitions in regions where the group does not have its presence.

6. Middle management capabilities in manufacturing in India for serving the group's global operations with a focus on Western Europe.

7. Stokota's existing business relationships in Europe to create a sales channel for the Company's auto components manufacturing capabilities with the likes of DAF, Volvo, Renault, Iveco, MAN, Scania, etc.

The Autoline - Stokota group will strive to leverage synergies and core competencies across continents and truly operate as a single global Company in the field of auto components and specialty vehicle manufacturing.

Source : Equity Bulls

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