Murugappa Group’s Electrical Engineering Company Acquires Radio Frequency Components Business from Renesas, Marking Its Foray into Semiconductor Design!
The company’s shares have delivered an impressive return of over 4,700 per cent in the past 5 years.
On October 4, 2024, CG Power and Industrial Solutions Ltd announced the signing of a Definitive Agreement, specifically an Asset Purchase Agreement, with Renesas Electronics America Inc. and other affiliates of Renesas Electronics Corporation. This agreement marks CG's strategic move to acquire the Radio Frequency (RF) Components business, which is integral to the semiconductor industry.
The acquisition, valued at approximately USD 36 million, will be carried out through one or more subsidiaries to be established by CG. The RF Components business includes essential assets such as equipment, intellectual properties, inventories, customer contracts, and select transferring employees. In the Calendar Year 2023, the RF components business generated annual revenue of about USD 56 million.
The completion of this acquisition is subject to the satisfactory fulfillment of various conditions, including obtaining approvals from the Committee on Foreign Investment in the United States and any other necessary regulatory and statutory requirements. CG Power anticipates that the acquisition will be finalized within six months, following the completion of these conditions.
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As a leading player in the Electrical Engineering Industry and part of the Murugappa Group, CG Power aims to leverage this acquisition to enhance its capabilities and expand its portfolio in advanced semiconductor solutions. This strategic investment reinforces CG's commitment to growth and innovation in the high-tech sector.
On Friday, the company’s shares closed at around Rs 718.80 and the current market capitalization stands at Rs 1,09,867 crore. Additionally, the shares have delivered an impressive return of over 65 per cent in the past 1 year and a multibagger return of over 4,700 per cent in the past 5 years.
As per the Quarterly Results, in the Q1 FY25, CG Power and Industrial Solutions Ltd recorded a revenue of Rs 2228 crore compared to Rs 1874 crore. It reported an operating profit of Rs 327 crore. The net profit stood at Rs 241 crore. Looking at the annual performance, the company generated a revenue of Rs 8046 crore in FY24 compared to Rs 6973 crore. The operating profit for FY24 was Rs 1142 crore with a net profit of Rs 1428 crore compared to a profit of Rs 963 crore in FY23.
Disclaimer: The article is for informational purposes only and not investment advice.