June 2010
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RSB acquires 70% stake in Belgian engineering firm

RSB Transmissions, engaged in manufacturing of automotive, construction and farm equipment, has acquired, through its Netherland based arm RSB Europe BV, 70 per cent stake in the Belgium based construction equipment aggregate manufacturer MSI (Mechanical Supplies International) for an undisclosed sum.

RSB currently has 10 manufacturing plants spread over 7 locations in India and the USA

While the turnover of MSI stood at 21 million Euro in the pre-recession period, its new owners now hope to take the turnover to 28 million Euro by 2012 without any additional investment.

The Belgian company, situated in the city of Tessenderlo, manufactures heavy fabrication aggregates for excavators, off-highway machines and windmills which are similar to the products of RSB manufactured in its Jamshedpur, Dharwad and Chennai plants.

A company release said, the acquisition of majority stake in MSI will provide immense synergy benefits to RSB and MSI as both companies have identical technology, process and machines. The Caterpillar Belgium and Caterpillar France are the major customers of MSI, just as Caterpillar India is one of the prime customers of RSB.

Through this acquisition, RSB, which exports substantial heavy fabrications to Europe, can now have a front-end presence in Europe to consolidate and grow its exports. The heavy fabrications which were otherwise logistically impossible to ferry from India to Europe can now be offered by RSB – MSI combine, said the release. RSB-MSI association will also leverage each other’s capabilities and add new customers to their respective businesses both in the European and India geography.

This will be beneficial for both to expand their top line and improve their bottom line.

It may be recalled that in November 2006, RSB Transmissions had acquired the Michigan based Miller Brothers Manufacturing – since rechristened RSB NA – a specialty auto transmission component manufacturing company.

The Group has successfully managed this acquisition and hence even during the last two years of deep recession RSB NA has been both PBT and PAT positive.

In the closely held RSB Transmission, IL&FS Investment Managers Limited (IIML) and Evolvence Limited are minority PE investors.

RSB Transmissions had a turnover of Rs 750 crore in FY10 and is aiming to hit Rs 1000 crore in FY 11. The company is planning to go for an IPO sometime in the last quarter of 2010 to fund its ambitious growth plans.

Source: Business Standard

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