Deal Teaser – Auto-electrical component industry supplying electro-mechanical and auto-electrical switches looking for a joint-venture/technical-collaboration partner – India

Business Description

Established in the year 1964, predominantly caters to the needs of OEMs belonging to segments like Heavy earth moving equipments, Tractors, Heavy & Light commercial vehicles with a comprehensive portfolio of automotive switches for dashboards, engines, safety applications, illumination, automotive gadgets, automobile attachments and implements. The company is among the few players in the industry that provide end to end solutions from design & development, moulds to delivering the switches to its clients. The company’s vision is to achieve healthy sales growth and be a solution provider by building competency in all types of switches & sensors supplying to customers, providing products that are cost effective and establishing a point of presence near to customer, satisfying all stakeholders profitably.

The company’s products are mainly sold to the tractor OEMs who are witnessing strong growth in sales even in the covid era. The tractor sales for December 2020 were around 62,000 units compared to 43,000 units in December 2019 in India. At the peak of farm protests, around 78,500 tractors were sold in India displaying robust and sustained demand whereas the supply side situation has also improved.

Reason for Selling

It is more of a partnership offer than a sale. The firm is on the lookout for a foreign partner to enter into a Joint Venture for growth and development

Legal Constraints

NONE they do not have any legal disputes etc that are pending

Key Financials

  • Revenue Target: USD0.00
year sales ebitda net income nfp
USD0.00 USD0.00 USD0.00 USD0.00

Additional Information

What is on offer to foreign partner ?
1. Entry into one of the biggest and promising markets in the world - India
2. A 55 year old, established & reputed company having over 50% market share in switches & sensors of the tractor OEM market as its local partner (ready customer base for existing & new products)
3. Joint development of new markets and verticals globally
4. Joint development of products that were earlier not part of their range
5. To develop and manufacture quality products in India at low cost for its existing customers
6. Access to unique in-house testing machines & equipment developed by a group company which is very rare to this company. More such products can be developed depending on new & emerging requirements

**Transaction types considered**
They are inviting partners to invest in & co-own their existing business also other types of arrangements can be considered once the discussions progress to advanced stages between the two parties.

**Main Products**
auto electrical switches
push type switches
horn type switches
starter switches with & without combination lock
auto mechanical switches
electronic switch & sensor
battery cut-off switches
piano switches
sensors

**The ideal buyer should provide the business with**
Its a partnership firm where all the partners/co-owners belong to the same family 1. Advanced & Latest Technology that is not available in India for manufacturing switches & sensors for tractors 2. Range of current & latest products offered to tractor OEMs in developed markets to be offered to its local customers 3. Access to the existing markets of the overseas partner for its products 4. Joint development of new markets and verticals globally 5. Joint development of products that were earlier not part of their range 6. Global product quality, systems, best practices and benchmarking that the overseas partner should bring in 7. Equity Participation into the Joint Venture where the Indian partner will put in its existing business & the in-coming foreign partner will bring in investments (funds, technology, machines & similar fixed assets) to have mutually agreed joint ownership structure and management rights 8. R&D capabilities for designing & developing products that OEMs are looking to implement in new platforms 9. To upgrade from a products (switches, sensors etc) company to a solutions (assemblies) company 10. The company is developing a separate line of products for electric vehicles - battery charger, dc/dc convertors and electronic/electrical assemblies for which product development and prototyping is complete. In this field, the company is looking for overseas partners having presence and experience in these products to help further develop and market it in India and overseas

Ravi Singhania

Managing Partner
Singhania & Partners LLP