Auto components major Bharat Forge, group company from Kalyani Group, has acquired the US-based Walker Forge Tennessee LLC (WFT) and PMT Holdings Inc., USA for $14 million (Rs. 95 crores). The acquisition was completed through its wholly-owned subsidiary Bharat Forge America.
With the completion of this transaction Walker Forge Tennessee LLC and PMT Holdings Inc, USA has become indirect subsidiaries of the company. As per a statement, this acquisition creates a strategic manufacturing footprint in North America to leverage
WFT is a supplier of complex, steel and high-alloy steel, engine and chassis components to a diverse group of customers across automotive and industrial sectors.
This move gives it a manufacturing presence in US and also closely resembles its past acquisitions strategies to penetrate European market. This acquisition will make its presence felt in the passenger car and commercial vehicle segments as well into industrial sectors such as construction and mining and allied industries.
Bharat Forge has always been looking into diversifying its presence beyond the class 8 truck segment, tapping into the US passenger vehicle segment and growing the industrial business but within the oil and gas segment, which has seen a slow growth.
Bharat Forge traditionally not rooting for the North American market surprised many with this acquisition. Analysts are skeptical about how it would help in getting more orders and get some OEMs on board. Earlier, the company had acquired France based Mecanique Generale Langroise for 11.8 million Euros. Out of the total seven companies acquired by the company, the four have been in Europe and one in North America. On the same breath, two companies from North America and China have been sold off.
Acquisitions such as that of Kristall Forge of the UK, CDP and CDP Aluminiumtechnik of Germany, Federal Forge, based in Michigan along with Imatra Kilsta AB and its subsidiary Scottish Stampings have all contributed in expanding the international revenue of Bharat Forge by above 50 percent.
Bharat Forge is now the World’s largest forging company. The acquired US firm is expected to record revenues of $28 million with a balanced revenue mix across the automotive and industrial sectors.