Sona to sell entire stake in SKSSL

 Sona Autocomp Holding has entered into an agreement to sell its entire stake in Sona Koyo Steering Systems (SKSSL) to JTEKT Corporation for Rs 419.28 crore.

 The deal values SKSSL at an enterprise value of Rs 1,922.5 crore and represents a 10.1 times multiple of SKSSL's EBITDA for the last 12 months ended September 30, 2016. The share price of Rs 84 per share represents a premium of around 34% to the average closing price of SKSSL’s shares for last three months. The transaction will also result in a partial exit for JM Financial Private Equity Fund, which made an investment in Sona Autocomp Holding in 2007, a release said.

 JTEKT Corporation has also made a public announcement to acquire an additional 5.16 crore shares through an open offer, representing an additional 26% of Sona Koyo’s existing share capital, at a price of Rs 84 per share aggregating to Rs 434.05 crore from the public shareholders of Sona Koyo. Subject to receipt of approvals and completion of conditions mentioned in the agreement, the transaction is expected to close by the first quarter of the financial year 2017-18, the release said.

 On completion of the transaction and in the event that the open offer is fully subscribed JTEKT Corporation would have increased its stake to 71.22% in SKSSL from the current 20.10%. Sunjay J Kapur and Sona Group nominee directors, Rani Kapur and Kiran Deshmukh, will step down from the board of SKSSL upon closure of the transaction, the release added.