Ceat (500878) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition aligns with premiumization, international expansion, and focus on high-margin specialty segments.

• Camso is a premium OHT brand with strong presence in North America and Europe, serving 50+ OEMs and 200+ dealers.

• Entry into the rubber tracks segment, which CEAT did not previously manufacture, with higher profit margins and proprietary technology.

• OHT segment will contribute about 25% of revenues post-acquisition.

• Camso’s product range complements existing offerings and provides access to a $2 billion compact construction market.

Financial terms and conditions

• Deal valued at $225 million (INR 1,900 crores), structured as an asset purchase.

• Funded through a mix of internal accruals and debt, with incremental debt not exceeding 70% of the transaction value.

• No legacy liabilities or debt will be assumed; only assets and inventory are acquired.

• Net debt to equity expected to remain below 1, and net debt to EBITDA under 3 post-acquisition.

Synergies and expected cost savings

• Anticipated synergies in plant operations, raw material procurement, supply chain, and logistics.

• Cross-selling opportunities between CEAT and Camso brands across OEM and distribution channels.

• Minimal overlap in distribution networks, providing access to 200+ new distributors.