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JK Tyre, the market leader in truck and bus radial segment has recently completed the Rs 2,200 crore acquisition of Cavendish Industries which retains the three major tyre business undertakings of Birla Tyres. Going well with some major acquisitions in the industry, the company now eyes at the Rs 10,000 crore annual revenues in the ongoing fiscal. However, the previous year, the company’s revenue stood at Rs 7,800 crore.
The chairman and managing director of the Delhi-based tyre manufacturer, Mr. Raghupati Singhania seemed positive on the fact that they will come up as the second largest player in India when it comes to domestic sales. He was also confident of making the lately obtained Haridwar unit operational.
JK Tyre and Industries have acquired the Haridwar located Lasker manufacturing unit of BK Birla’s Kesoram Industries for Rs 2,200 crore. The plant manufactures a wide range of tyre, tubes and flaps. The purchase of this manufacturing facility will not only bolster its stand in the tyre industry but also smoothen its way to foray in the high margin two-wheeler and three-wheeler tyre arena.
Funded by equity and debt, the acquisition has brought the tyre major equities worth Rs 700 crore from internal accumulations, while a debt of Rs 1,495 crore is being raised. The other companies from the JK group, JK Lakshmi Cement and JK Paper, came together to raise the debt, as a result, JK Tyre was free from any debts during the acquisition. The company by now owes a debt of Rs 2,000 crore approximately, which was raised to fund their past acquisitions including Mexican tyre company, Tornel.
