Tega to buy 77% in US co Molycop in 10,000cr deal

KOLKATA: Joining hands with funds managed by Apollo, city-based Tega Industries will acquire US company Molycop for over Rs 10,000 crore, making this the largest global acquisition by a Bengal company. The consortium has acquired a 77% stake in the US company, said sources.

Tega entered into a term sheet to acquire Molycop - a global supplier in grinding media for the mining industry - from an affiliate of American Industrial Partners (AIP) at an enterprise value of approximately $1.5 billion (Rs 13,200 crore). It is also learnt that the acquisition would be funded through a combination of equity and debt, with the equity portion being $680 million (around Rs 6,000 crore).

Tega Industries and Molycop together delivered $1.7 billion (Rs 15,207 crore) in revenue and $217 million (Rs 1,906 crore) in EBITDA last year.

In a statement, Tega Industries informed stock exchanges that this strategic, complementary acquisition will establish the company as one of the world's leading designers and manufacturers of 'critical-to-operate' consumables for certain production steps in mining, mineral processing and material handling industries with an innovative and differentiated product portfolio.

Tega Indistries MD and group CEO Mehul Mohanka said, "I met Kim Marvin, general partner of AIP, for the first time in 2017 at our Dahej plant in Gujarat, and a part of me always knew that we would make a meaningful association someday. I am glad to see that the day has arrived in Tega's 50th anniversary year. With this strategic acquisition, and in partnership with Apollo Funds, we will accelerate innovation, greatly expand market reach, and create significant value for our customers."