Suprajit Engineering, a leading global player in light-duty cable manufacturing, has entered into a Share Purchase Agreement (SPA) to acquire Stahlschmidt Cable Systems (SCS), a renowned cable manufacturer currently undergoing insolvency proceedings in Germany. This strategic acquisition will expand Suprajit’s global footprint and is set to enhance its manufacturing capabilities and market reach.
SCS is recognized for its high-quality light-duty cables, serving an elite customer base with operations spanning Germany, Canada, China, Poland, and Morocco. The acquisition includes a comprehensive asset and equity purchase, integrating SCS’s valuable resources into Suprajit’s global supply chain. This deal will enable Suprajit to tap into SCS’s cost-effective manufacturing in Morocco, strong German engineering, and efficient China exports facilitated through Canada.
The acquisition, valued at €13.5 million in enterprise value, will be executed through Suprajit USA Inc., with new entities being incorporated in Canada and China, in addition to the recently established Suprajit Germany GmbH. The transaction is designed to be completed in two stages: the first phase, encompassing Germany, Poland, and Morocco, is expected to close by July 1, 2024. This phase will address key restructuring requirements and debt reduction. The second phase, covering Canada and China, is slated to conclude a few months later, contingent upon similar restructuring conditions.
Suprajit plans a meticulous one-year restructuring strategy to streamline operations and integrate SCS into its global network. A significant aspect of this plan involves the relocation of operations from Poland, which is now complete, with essential personnel transitioning to support the Morocco facility. Additionally, there will be a reduction in workforce at SCS’s headquarters in Germany. Despite these changes, the German team will remain a crucial part of Suprajit’s operations, ensuring continuity and leveraging their expertise.
Ajith Rai, Founder and Chairman of Suprajit, emphasized the strategic importance of this acquisition. "This acquisition will further strengthen our global Light Duty Cable manufacturing footprint. Suprajit will have enhanced ability to provide customers with low-cost manufacturing bases, nearshoring capabilities, and a perfect customer-centric supply chain footprint. This acquisition, post its consolidation and restructuring, will yield improved customer service, global growth, and margin improvements over the medium term."
N.S. Mohan, Managing Director and Group CEO, echoed this sentiment, highlighting the trust and confidence this move signifies among major OEMs and Tier 1 vendors in Europe. "This transaction reaffirms Suprajit's position as a trusted global cable manufacturer. The acquisition, backed by our commitment and support from customers, vendors, and SCS’s management, marks a significant step in reviving a company with a proud 100-year legacy".
Upon completion, the integration of SCS is projected to contribute an additional €50 million in revenues, solidifying Suprajit’s position in the global cable manufacturing industry and enhancing its capability to deliver cost-effective and high-quality solutions to its customers worldwide.