CHENNAI: Tube Investments of India Ltd, part of the $ 4.7-billion Murugappa Group, has entered into an agreement to acquire 80 per cent stake in two Colombo-based premium bicycle makers for $3.34 million (Rs 21.5 crore) in an all-cash deal, it said in a stock-exchange disclosure.
The two companies, Great Cycles (Pvt) Ltd and Creative Cycles (Pvt) Ltd, are promoted by Shuyuan Gan, who holds 100 per cent stake in them.
The acquisition is part of Tube Investments’ strategy to secure the backend supply chain for its bicycles division, it said. “With this acquisition, we will be able to expand the global supply chain for the premium cycles portfolio of TI Cycles and grow our market share in the premium segment even more aggressively,” said L Ramkumar, managing director of Tube Investments.
The acquisition is likely to be completed before 31 March 2018. Creative Cycles and Great Cycles have manufacturing facilities in the Katunayake Export Processing Zone, Colombo with a capability to produce a wide range of bicycles, from kids to performance cycles,from steel to alloy bikes.
In the year ended March 2017, Tube Investments of India’s total revenue from operations was Rs 4,820 crore and net profit was Rs 167.62 crore.