Blackstone to acquire $300 million stake in Sona BLW, to merge it with Comstar
American private equity firm Blackstone will merge its recently acquired auto component firm Comstar Automotive with Sona BLW, when the deal with the latter is consummated. Blackstone is in advance talks to acquire a stake in Indian auto parts maker Sona BLW Precision Forgings. Blackstone will take over the entire 32% stake held by JM Financials for about $300 million to make a way out for JM Financials. An email to JM Financials remained unanswered while Blackstone and Sona BLW chose not to comment till the time of going to press. Sunjay Kapur and family, the promoter of Sona BLW, will continue to hold a 68% in the company. Blackstone aims to scale up its business in auto parts space by merging Comstar Automotive with Sona BLW. In April this year, Blackstone acquired controlling (almost 100%) stake in Comstar Automotive Technology for Rs 1000 crore.
“Blackstone is expected to get the entire stake held by JM Finance. The deal is currently at the competition commission of India for clearance,” one of the persons aware of the matter said. JM Financials have been trying to cash out for a quite some time now. Post this clearance, Blackstone will approach CCI to get approval for the merger of Comstar and Sona BLW business.
Blackstone with this acquisition aims to increase its exposure in auto component space. The PE firm has been one of the prominent investors in automotive space. Sona BLW is a leading manufacturer of precision forged (net shaped) bevel gears, differential case assemblies and synchronizer rings having plants in Pune and Gurgaon.
The Chennai-headquartered Comstar Automotive manufactures starter motors, starter motor kits and alternators for automotive applications. The company was established in 1999 as a subsidiary of Visteon Corp., then a unit of Ford India.
Earlier in 2016, Blackstone made an almost four-fold return on its investment in tractor manufacturing firm International Tractors Ltd by selling its 17.75% stake to Japan’s Yanmar Co. Ltd for Rs1,700 crore.