Key Points of Deal:
- Sona BLW Precision Forgings Ltd witnessed a series of block deals on Monday, with a 19 percent stake changing hands in 35 bunches.
- Blackstone, one of the world’s largest private equity firms, announced its plan to sell its entire 20.5 percent stake in Sona BLW Precision Forgings Ltd, resulting in a lower opening of the auto component maker’s shares.
- The deal will be managed by investment bank JM Financial at a floor price of Rs 400 per share.
- Sona BLW shares were trading 4.5 percent lower at Rs 416.35, while the BSE Sensex was up 0.59 percent at 59,482 points.
- Blackstone acquired Comstar Automotive Technologies in 2017, followed by the acquisition of Sona BLW Precision Forgings Ltd in 2018, and later merged both businesses to form Sona Comstar.
- Sona Comstar supplies a wide range of parts to original equipment manufacturers located in the US, Europe, India, and China.
- The expected sale of at least $583 million could increase due to high demand.
Details of Deal:
Sona BLW witnesses a series of block deals on Monday, resulting in around 19 percent stake in the company changing hands in 35 bunches. However, details of buyers and sellers are currently unavailable.
The auto component maker’s shares opened lower following the announcement of promoters Blackstone selling its entire 20.5 percent stake in the company, making it one of the world’s largest private equity firms. As per sources from CNBC TV-18, the deal will be managed by investment bank JM Financial at a floor price of Rs 400 per share.
Sona BLW shares were trading 4.5 percent lower at Rs 416.35, and the BSE Sensex was up 0.59 percent at 59,482 points. The stock hit an intraday low of Rs 408.10 and saw its sharpest decline since February 24, 2022, being lower for the fourth consecutive session. Year to date, it has faced a decline of 1.8 percent.
Blackstone acquired Comstar Automotive Technologies in 2017, followed by the acquisition of Sona BLW Precision Forgings Ltd in 2018, and later merged both businesses to form Sona Comstar. According to the report, Blackstone invested approximately $385 million in both companies. The company made Rs 12,800 crore or $1.6 billion in capital gains through two previous part-exits in 2018 to 2012. It sold Rs 5,250 crore at the time of Sona BLW public issue in June 2021 and another chunk for Rs 4,044 crore in August 2022.
As per its website, Sona Comstar supplies a wide range of parts, including differential assemblies, gears, conventional and micro-hybrid starter motors, BSG systems, EV traction motors, and motor control units to original equipment manufacturers located in the US, Europe, India, and China. The expected sale of at least $583 million could increase due to high demand.
About Sona BLW:
Sona BLW Precision Forgings is an automotive technology firm based in India. Their primary focus is on designing, producing, and delivering engineered systems and components for automobiles, including differential assemblies, gears, conventional and micro-hybrid motors, BSG systems, and EV traction motors. They cater to all types of vehicles.
In addition to the hardware systems and components, Sona BLW Precision Forgings also creates base and application software solutions. They develop both mechanical and electrical engineering solutions.
About Blackstone:
Based in New York City, Blackstone Inc. is an American company specializing in alternative investment management. Over the past 30 years, Blackstone’s private equity arm has become one of the leading investors in leveraged buyouts. Meanwhile, their real estate division has been actively acquiring commercial real estate assets.
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