Maharashtra-based auto ancillary firm Precision Camshafts Ltd has announced the acquisition of German precision machining company MFT Motoren und Fahrzeugtechnik GmbH (MFT) for an undisclosed sum.

PCL will hold 76 per cent in the German company, while MFT Managing Director Guido Glinski will hold the balance 24 per cent stake and continue to run the company.

The acquisition is expected to help strengthen ₹460 crore PCL’s niche machining capabilities and diversify into new products.

A financially strong company, MFT reported a turnover of about ₹160 crore (about €20 million) in 2017. Based in Cunewalde, Germany, the company is a tier 1 supplier of machined components to top OEMs including Volkswagen, Audi, Opel, BMW, according to a company statement.

“This acquisition is value accretive which will open up synergetic opportunities for us through new product offerings and will establish a global brand presence. MFT will not only complement our relationships with current OEMs in that region but will also help in enhancing our customer base,” said Yatin Shah, PCL’s Chairman and Managing Director.

With the merged know-how in manufacturing, increased financial bandwidth from PCL and proximity to European customers, there is a great potential to scale up business in Germany.

“With PCL as our majority investor, MFT is expanding its global footprint. It will allow us to get better access to the development departments of the German and European car manufacturers. This will enable us to actively shape the disruptive changes in the automotive industry and prepare ourselves for the challenges in the future development of the conventional powertrain and become part of the alternative drivetrain technologies. This also offers us and our employees a new vision for a successful future,” said Guido Glinski, Managing Director, MFT.

Maharashtra-based PCL is a manufacturer and supplier of camshafts, a critical engine component, in the passenger vehicle segment. Its key clients include General Motors, Ford, Hyundai, Mahindra, Escorts, Tatas and Maruti Suzuki.

PCL exports 78 per cent of its production and caters to about nine per cent of the global market. It has two manufacturing facilities —an EOU unit and a domestic unit both situated at Solapur, Maharashtra.

In the recent past, PCL has won a global contract from General Motors with an aggregate value of ₹580 crore over the lifetime and a global contract from Ford Motors with an aggregate value of ₹550 crore. Both programmes are on track and will start serial production in 2018-19. In addition to this, PCL has won new contracts for fully machined camshafts from Ford, General Motors and Mahindra & Mahindra with an aggregate value of ₹275 crore over a lifetime.