TO THE NATIONAL STOCK EXCHANGE COMISSION
RELEVANT INFORMATION NOTICE
Pursuant to article 228 of the Royal Legislative-Decree 4/2015, dated 23 October, approving
the consolidated version of the Securities Market Act and to other applicable regulations, CIE
Automotive, S.A. announces that is Indian subsidiary Mahindra CIE Automotive has entered
into an agreement to acquire all the shares of the Indian company BillForge Pvt. Ltd.
The price of the transaction amounts to 13.312 million rupees (178 million euros
approximately). 51% of said amount will be paid by Mahindra CIE Automotive Ltd in cash.
The remaining amount will be exchanged for shares of Mahindra CIE Automotive Ltd to be
underwritten by the current shareholders of BillForge Pvt. Ltd in a share capital increase
offered exclusively to such shareholders. The agreed exchange value will be 200 rupees per
share.
The in-cash part of the price will be funded by means of the available cash of Mahindra CIE
Automotive Ltd and by means of a 4,500 million rupees’ (60 million euros approximately)
contribution to be made by CIE Automotive through a share capital increase in Mahindra CIE
Automotive Ltd. The agreed value for such share capital increase will be 200 rupees per share
as well.
BillForge Pvt. Ltd was founded in 1985. It is an industrial family group (although participated
by a financial investor with a minority stake) based in Bangalore (India) and with factories in
India (Bangalore, Coimbatore and Haridwar) and Mexico.
BillForge Pvt. Ltd manufactures cold and hot-forged and machined components and subsets
for the auto industry (four-wheel and two-wheel vehicles) and it has a diversified commercial
footprint, which will help to reduce customer concentration in India.
BillForge Pvt. Ltd’s turnover in the fiscal year closed on 31 March 2016 was 5,823 million
rupees (78 million euros approximately).
The closing of the transaction remains subject to the holding of a General Shareholders’
Meeting of Mahindra CIE Automotive Ltd and to other customary conditions in this kind of
transactions, which are expected to be conducted during October 2016.
In addition to the above, the Board of Directors of Mahindra CIE Automotive Ltd has
resolved to seek shareholders’ approval to issue new shares of the Company to be placed
among qualified investors.
- 2 -
A presentation describing the transaction and the main features of BillForge Pvt. Ltd and a
press release are enclosed herewith. Said press release has been made public in India
simultaneously to this relevant information notice.
Bilbao, 12 September 2016.
Roberto Alonso Ruiz.
Secretary of the Board of Directors
Interim UpdateInterim Update
Interim
UpdateInterim
Update
Mahindra CIE Automotive Limited
September 12, 2016 │ Mumbai
1
MCIE E l ti
MCIE
E
vo
l
u
ti
on
Consolidated Sales* Consolidated EBITDA Margin
14.107
11,20%
12%
* There is seasonality across
quarterly revenue figures
13.721
13.000
13.500
.
N
R mn)
5,80%
6%
8%
10%
(%)
12.000
12.500
Q3 - Dec 13 Q2 - June 16
(I
N
0%
2%
4%
Q3 - Dec 13 Q2 - June 16
Consolidated Net Debt Share Price*
* NSE Closing Price
14.105
177,9
200
9.612
(INR mn)
48,85
50
100
150
(INR)
Q3 - Dec 13 Q2 - June 16
0
50
Q3 - Dec 13 Q2 - June 16
31-Mar-15 31-Dec-15
Note:
2
Note:
1.Quarter ending Dec’13 (Q3F14) was the first quarter for which MCIE Consolidated results are available. They were presented in the Q3F15 update
which was the first consolidated investor update put out by the company. These are unaudited results
2.Quarter ending June’16 (Q2C16) is the latest quarter for which the results are available. These are unaudited results
3. EBITDA nos. are normalised and without one time exceptional costs
MCIE St t
MCIE
St
ra
t
egy
MCIE Strategy
MCIE Positioning
Phase 1: 2014-2017
Phase 2: 2017-2020
“Expand”
Cf i
MCIE is CIE’s vehicle to
expand in:
Forgings Worldwide
“Consolidate”
Optimise operations in India
Turnaround Europe
Control capex &
r
educe debt
C
apex
f
or expans
i
on
Expand in India & ASEAN
Entry into plastics and
aluminium products
Redefine product portfolio
Forgings
Worldwide
In Asia for all other
verticals
Control
capex
&
r
educe
debt
Initiate new products &
customers (In Process)
at MFE & MC and
optimize plant locations
“Achieve CIE
Financial Norms”
“Grow”
MCIE has made progress towards achieving its Phase 1 strategy and
ready to embark on Phase 2
33
MCIE announces its first acquisition as part of Phase 2 = Bill Forge Pvt Ltd. (BFPL)
Bill Forge: Forging & Machining of Auto Components
Bill
Forge:
Forging
&
Machining
of
Auto
Components
Bill Forge is a precision forging and machining company focused on two-wheeler and passenger
ttiilftitiidhl
ltd
bli
car au
t
o componen
t
s, pr
i
mar
il
y
f
or s
t
eer
i
ng,
t
ransm
i
ss
i
on an
d
w
h
ee
l
-re
l
a
t
e
d
assem
bli
es
Currently operates 6 manufacturing
facilities across India : 4 in Bangalore, 1
in Coimbatore and 1 in Haridwar and an
i
lt
i
Cl
Mi
One of a handful of Indian forging companies
with capabilities in cold and warm forging
in addition to hot forging, as well as
i
ith
hi tl
t
f
44
upcom
i
ng p
l
an
t
i
n
C
e
l
aya,
M
ex
i
co exper
i
ence w
ith
h
or
i
zon
t
a
l
par
t
f
ormers
Bill F U i Di ifi d & C l t B i Mi
Bill
F
orge:
U
n
i
que,
Di
vers
ifi
e
d
&
C
omp
l
emen
t
ary
B
us
i
ness
Mi
x
Customer Mix (F16) Segment Mix (F16)
Product Mix (F16)
2W
Export
Steering
Race
CR
Others
Top 10 = 72%
3W
4W –
Cars &
UVs
CVO /
Tulip
Hub
Shaft
Yoke
Retainer
4W presence to grow further
Exports to Thailand, China,
Mexico, Europe, USA
E port ha e gro n more than
Key products include steering
races and engine valve retainers
for two-wheelers and constant
elocit joints t lips steering
Key 2W customers: Hero, Bajaj, HMSI
and TVS
Key 4W customers: Ford, GKN, NTN,
Hub
E
x
port
ha
v
e
gro
w
n
more
than
~2.5x over last two years;
v
elocit
y
joints
,
t
u
lips
,
steering
shafts, steering yokes and wheel
hubs for passenger cars
High value addition
as majority of
Nexteer, Rane NSK
Attractive underlying OEM exposure,
with majority of passenger cars business
iIdi’b t
lli / f t t
i
High
value
addition
as
majority
of
products are either fully finished
(~60%) or semi-finished (~30%)
Diversified Customer Portfolio + Exposure to leading 4W OEMs + Strong presence in 2W + Significant Exports
i
n
I
n
di
a
’
s
b
es
t
-se
lli
ng
/
f
as
t
es
t
-grow
i
ng
OEMs like Maruti, Hyundai and Honda
55
Diversified
Customer
Portfolio
+
Exposure
to
leading
4W
OEMs
+
Strong
presence
in
2W
+
Significant
Exports
&
Diversified Product Mix + High Machining Content + Competitive position in top products
Bill Forge (BFPL): Excellent Track Record
Bill
Forge
(BFPL):
Excellent
Track
Record
REVENUE (INR Millions)
5,823
INR mn FY16
Sales 5,823
1,915
EBITD
A
1,205*
PAT 514
Net Financial Debt 754
2010A 2016A
EBITDA* (INR Millions)
1 205
*After one time adjustments. This is based on MCIE
analysis of BFPL’s audited FY2016 nos. Other nos. are
as per BFPL’s audited FY2016 nos.
Steady historical revenue growth and
profitability driven by market share, product
focus, process engineering capabilities and
1
,
205
attractive underlying OEM exposure
2010A
2016A
356
66
Note: Fiscal year based on year ending March 31
st.
. ‘A’ stands for Actuals.
2010A
2016A
Bill F R ti l f A i iti
Bill
F
orge:
R
a
ti
ona
l
e
f
or
A
cqu
i
s
iti
on
Substantially increases revenue and profitability from Asian markets
Reinforces
MCIE
’
s
position
as
one
of
the
leading
global
forgings
player
(entry
into
Reinforces
MCIE s
position
as
one
of
the
leading
global
forgings
player
(entry
into
cold/warm forgings)
Leads to diversification of MCIE India : Complementary product and customer mix, which
helps MCIE India to diversify its business portfolio
Adds “Eastern OEMs” (70% + market passenger vehicles) as customers - Indirectly supplies to
Maruti, Hyundai and Honda (through Tier-1s)
Increases exposure to car segment - currently 33% of MCIE India production is for UV’s
Add
“S th
i”
d
i
t
it
th
“N th
i”
tl
MCIE
t
ll
t
Add
resses
“S
ou
th
reg
i
on
”
an
d
g
i
ves en
t
ry
i
n
t
o
th
e
“N
or
th
reg
i
on
”
- curren
tl
y
MCIE
ca
t
ers
l
arge
l
y
t
o
OEMs in “western region” (Pune cluster)
Provides entry into two-wheeler segment
BFPL
i
ll
BFPL
i
swe
ll
run
Consistently strong historical performance and margins across cycles
Strong management team, led by industry veterans, team is being retained fully
Diversified product portfolio and customer base
Significant
machining
content
Significant
machining
content
CIE can help to improve operational & financial parameters further
Tti
i
bfiil
f
ll
tkhld
f
bth
MCIE
&
BFPL
t
li
77
T
ransac
ti
on
i
s
b
ene
fi
c
i
a
l
f
o
r
a
ll
s
t
a
k
e
h
o
ld
ers o
f
b
o
th
MCIE
&
BFPL
–
cus
t
omers, supp
li
ers
and employees
Indicative
Financial Summary MCIE
& Bill Forge
Indicative
Financial
Summary
MCIE
&
Bill
Forge
MCIE
BFPL
MCIE
–
9Months
Consolidated Sales 38162
BFPL
Sales 5,823
EBITDA
1 205
*
India Sales % of Total 32%
LCC Sales % of Total 32%
EBITDA
1
,
205
EBITDA % 20.7%*
PAT 514
EBITD
A
3780
EBITDA % 9.8%
India EBITDA
% of Total
NA
EPS NA
Net Debt 754
India
EBITDA
%
of
Total
NA
PAT 1362
EPS
5.6
*After one time adjustments. This is based on
MCIE analysis of BFPL’s audited FY2016 nos.
EPS
5.6
Net Debt 9,612
Note
MCIE
9 th CY15 fi EBITDA i ith t ti ti l t N t D bt i 31
D
2015
88
•
MCIE
nos
9
mon
th
s
CY15
fi
gures.
EBITDA
i
s w
ith
ou
t
one
ti
me excep
ti
ona
l
cos
t
.
N
e
t
D
e
bt
i
s as on
31
-
D
ec-
2015
•BFPL nos. are as per FY16 audit report
8
Transactions
Transactions
MCIE to acquire 100% of Target (“BFPL”) for INR 13,312 mn
Preferential allotment of 31.99 mn equity shares to shareholders of BFPL at
INR
200
/share
(
INR
6
399
mn
)
INR
200
/share
(
INR
6
,
399
mn
)
Preferential allotment of 22.5 mn equity shares to PIA2 (subsidiary of CIE) at
INR 200/share (INR 4,500 mn)
MCIE Board also resolves to raise funds upto INR 7,000 mn through issue of
equity / convertible / equity linked securities including by way of qualified
institutional
placement
99
institutional
placement
9
Structure Post
Acquisition & Preferential Allotment
Structure
Post
Acquisition
&
Preferential
Allotment
BFPL
PIA2
MVML
Pr dential
Others
Pre
Transaction
Pre
Transaction
BFPL
Shareholders
PIA2
MVML
Pr
u
dential
Others
100%
53.09%
20.17%
1.48%
25.26%
MCIE Total Shares
323.57 mn
BFPL
MCIE
BFPL
Post
Transaction
Post
Transaction
BFPL
Shareholders
PIA2 MVML Prudential Others
8.46%51.39%
17.26%
1.27%
21.62%
MCIE Total Shares
378.06 mn
TransactionTransaction
BFPL
MCIE
100%
This does not consider issue
of equity / equity linked
securities of up to
INR 7,000 mn via QIP
1010
Note: PIA2 is subsidiary of CIE; MVML is subsidiary of M&M Ltd.; Prudential is promoter group company; Others & BFPL
shareholders are public shareholders
10
Indicative Timeline for the Transaction
Indicative
Timeline
for
the
Transaction
Event
Estimated
Timeline
Board Resolutions & Announcement Sep 12
Shareholder meeting to approve issuance of equity shares Oct 13
Com
p
letion of
A
c
q
uisition of BFPL and issue of e
q
uit
y
shares unde
r
Oct 27
p
q
qy
preferential allotment to shareholders of BFPL and CIE
Oct
27
Stock Exchange approval for listing of equity shares issued under
preferential
allotment
Oct 31
preferential
allotment
111111
Thank you
Thank
you
visit us at mahindracie.com
BSE: 532756
NSE: MAHINDCIE
ISIN: INE536H01010
ISIN:
INE536H01010
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13
News
CIE Automotive’s Indian Arm,Mahindra CIE Automotive Limited (“MCIE”) to acquire Bill
Forge Private Limited (“BFPL”)
September 12, 2016
MCIE Board of Directors today resolved to acquire 100% of equity shares of BFPL for INR
13,312mn.
Further MCIE Board resolved to issue 54.49 mn shares to CIE Automotive SA (“CIE”) and BFPL
shareholders, including the Haridass Family and Kedaara Capital at INR 200/share.
Founded in 1982, BFPL is a market-leading precision forging company based in Bangalore,
India with 6 manufacturing facilities in India across Bangalore, Coimbatore and Haridwar and an
upcoming plant in Celaya, Mexico. Kedaara Capital invested in BFPL in 2015 to support the
growth of the company.
BFPL is a crucial supplier to a number of domestic and global two-wheeler and passenger car
OEMs and Tier 1 auto component companies. It manufactures a variety of cold, warm, hot
forged and machined components primarily for steering, transmission and wheel-related
assemblies.
This acquisition increases MCIE’s operations in the high growth Asian markets and reinforces
CIE group’s / MCIE’s position as a leading global forgings player. BFPL’s complementary
product and customer mix leads to a significant diversification in the business portfolio of MCIE
India.
According to JesúsMaría Herrera, CEO of CIE Automotive, “We welcome BFPL and Anil
Haridass and team to the CIE family. We are impressed with the high growth and profitable
business built by them. We believe that their integration with MCIE, will provide further
opportunities for growth for both MCIE and BFPL.”
Hemant Luthra, chairman of MCIE, says “BFPL has a unique business combining complex
products and brings many new customers to MCIE’s current portfolio. The global alliance
between CIE and M&M created excellent value for all stakeholders. This partnership bears the
same hallmark of a mutual faith in each other and a common ambition based on excellent team
chemistry. It reinforces CIE’s commitment to India and the region and is a big step forward in
creating both a global leader in forgings and a leader among Asian auto components firms.”
Anil Haridass, Managing Director, BFPL says “We see a strong cultural and value fit between
the CIE group and our company. We believe that the combination with MCIE will be beneficial
for all stakeholders – customers, suppliers and employees”
Manish Kejriwal and Sunish Sharma,of Kedaara Capital Advisors LLP, noted “The combination
of BFPL with MCIE reaffirms the attractive opportunity that exists in the Indian auto component
sector. We have enthusiastically supported the dramatic growth story at BFPL, and are now
very happy to partner and invest with the CIE team.”