Mumbai: Kolkata-based Tega Industries is all set to acquire a controlling stake in US-based Molycop after it signed a definitive agreement with the American Industrial Partners (AIP) an affiliate of funds that owns the company. With this acquisition, Tega Industries will be able to enhance its market position and expand its operational capabilities in the mining equipment sector.
Tega Industries has been raising funds for the $1.45 billion acquisition since September. The company, which is currently worth about ₹12,880 crore is one of India’s leading mining equipment manufacturers, with four manufacturing facilities in India and one each in Chile, South Africa and Australia.
The company is known for its flagship Mill Liners, water-resistant wear products, trommels and conveyor components. Last year, it introduced a new portfolio of products, including smart liners and sensor-based systems.
Molycop is expected to enhance Tega Industries portfolio with its grinding media, chemicals and rail wheels helping Tega Industries reach out to a larger network of 400+ mines in more than 40 countries.
This would be Tega’s fifth acquisition, helping the company boost its international profile. Its earlier acquisitions helped it gain a manufacturing presence abroad while expanding its product portfolio.
Prior to the fundraise, Tega had a manageable debt to EBITDA ratio of 0.87, which has declined over the years despite the capital expenditures for the acquisitions. Given that Tega Industries has gone out of its way to raise funds for this acquisition, the company, under Madan Mohan Mohanka, will have to prove that this acquisition will work just the way its previous ones did.
