Sona Group, Blackstone And Comstar To Create Global Automotive Platform – SONA COMSTAR
India, Friday, August 30, 2019 – Sona BLW Precision Forging Ltd., a leading company in automotive drivetrain solutions, private equity funds from Blackstone, a leading global alternative asset management firm, and Comstar Automotive Technologies Ltd., Blackstone’s automotive portfolio company focused on global, electric charging and starting solutions announce the completion of a transaction that forges a partnership between the firms. This newly forged partnership will create an India centric, EV focused automotive technology platform and will be called SONA COMSTAR.
Deal Background:
Blackstone, one of the world’s largest alternative asset management firms, aims to create an auto component platform to execute a buy-and-build thesis in India. As part of this, Blackstone acquired Comstar Automotive Technologies in 2018. Comstar designs, engineers and manufactures starting and charging systems for passenger and light commercial vehicles across the globe. Comstar’s products include BSG and ISG systems for full-hybrid vehicles, start-stop starter motors for mild hybrid vehicles, starter motors for conventional engines, as well as BLDC motors, alternators and other electrical motors. The Chennai headquartered company with an installed capacity of over 6.8 million electric motors, operates manufacturing facilities in India, USA, Mexico and China. Comstar is globally reputed for its zero PPM quality standards and its innovation culture which has helped the company produce “Photon” – the world’s lightest starter motor.
Separately, Sunjay Kapur led Sona Group owned 67% of Sona BLW Precision Forging Ltd, while the remaining 33% stake was held by JM Financial. Sona BLW with a consolidated turnover of INR 27 billion (~ USD 400 million), designs and manufactures precision forged bevel gears and differential assemblies for passenger, commercial and off-highway vehicles with a strong presence in electrical vehicles. It is a technology leader in its field with 85% market share of precision forged differential gears in India, 25% in the European market and 12% share of all vehicles globally. With its contracted pipeline the company is also set to grow in the differential assembly systems’ market as well. Sona BLW has 6 manufacturing plants spread across North and West India, and its European subsidiary operates 4 plants – Germany (3) and Hungary (1).
As part of this current transaction, Blackstone has purchased JM Financial’s stake and further invested primary capital in Sona BLW to combine it with Comstar, creating the new combined platform – SONA COMSTAR.
Mr. Sunjay Kapur will be the Chairman of the newly combined entity SONA COMSTAR and any other businesses that will be acquired or developed under this platform. Mr. Kapur said: “I am delighted to partner with Blackstone and Comstar to create Sona Comstar. This transaction marks the amalgamation of mechanical & electrical capabilities of two world class companies. We will now offer our customers integrated technology products and solutions for Hybrid, EV as well as conventional powertrains. With our EV focused automotive technology platform, we will cater to the future of the automotive industry. Sona Comstar will be amongst the largest auto component companies of the country.”
Mr. Amit Dixit, Senior Managing Director and Head of Blackstone India Private Equity, said, “The Indian automotive components space is attractive, both with India as a manufacturing hub for exports and as a domestic market. Sona has exceptional engineering capabilities, deep customer relationships, and a strong management team that has helped sustain its leadership position. The combination of Sona and Comstar is highly synergistic. There are opportunities to add on to this buy-and-build platform in this fragmented sector, especially in the current environment.”
Deal Synergies:
This platform allows Sona to expand its geographical footprint to China, U.S., Mexico and South India, while Comstar gets access to North & West India and European markets. Sona and Comstar have almost no overlap in customers, enabling both companies to benefit from being able to offer their products to each other’s customers. The combined entity serves most major OEMs across passenger vehicles, commercial vehicles and off highway vehicles in USA, Europe, India and China.
The transaction also enabled the companies to combine their R&D efforts and create a joint technology roadmap and solutions. It has enabled the creation of an “Integrated Electric Drive Unit” to power the drivetrains of electric vehicles. The technology brings together three different fields of engineering – materials, mechanical and electrical, to make products to power the future of mobility, which are “Stronger, Faster, Lighter”, also the tagline of the new company. This transaction has helped Sona Comstar in becoming one of India’s most respected and valuable auto technology companies.
For further information, please contact:
Ms. Amena Faridi
Ph: +91-11-9811904780 | 011-41552395
E-mail: [email protected]