Tega Industries to Acquire Molycop in Partnership with Apollo Funds
The acquisition of Molycop is a transformational step for Tega Industries, significantly increasing its global presence, product portfolio, and potential for revenue and cost synergies. The deal involves a substantial financial investment and is expected to have a long-term impact on the company's growth and profitability.
The announcement details a major acquisition that is expected to significantly strengthen Tega Industries' market position and improve financial performance through synergies and expanded product offerings.
* Tega Industries, in partnership with Apollo Funds, has entered into a term sheet to acquire Molycop, a global supplier of grinding media for the mining industry, from an affiliate of American Industrial Partners. * The transaction is valued at approximately $1.48 billion (₹12,307.60 crore) and is expected to close by December 31, 2025, or early January 2026, subject to regulatory approvals. * Tega's portion of the transaction will be funded through a mix of equity instruments, including preferential allotment and qualified institutional placements, amounting to $248 million (₹2,061.48 crore), with a debt infusion in Tega of about $112 million (₹930.88 crore). * The promoter family plans to participate in the preferential allotment and infuse ₹150 crore to ₹200 crore. * A deferred contingent liability of $120 million (₹998.40 crore) will be honored upon achieving predefined criteria linked to the reopening of select closed mines. * Molycop's client network covers more than 400 mines in 40 countries. * The acquisition will establish Tega Industries as a leading designer and manufacturer of consumables for the mining, mineral processing, and material handling industries. * The combined entity will have 26 manufacturing sites, enhancing proximity to customers and distribution strength. * Tega expects meaningful revenue and cost synergies, particularly in SG&A, and complementary sale of products, expanding EBITDA margins without adding fixed costs. * Tega Industries is expected to deliver a consolidated return on equity of 18%. * The primary focus will be on seamless integration of businesses over the next two years, aiming to expand EBITDA margins from about 11.5% to 15%. * The company plans to relocate the headquarters to a more strategic location, yielding cost savings of $7 million (₹58.23 crore) and establish global capability centers, generating an additional $5 million (₹41.60 crore) in annual savings. * Overall, Tega expects to unlock EBITDA level synergies of $20 million (₹166.40 crore) by year two, scaling up to $30 million (₹249.60 crore) annually from year four onwards. * Molycop's current debt stands at approximately $1 billion (₹8,320 crore). * In partnership with Apollo, the debt will be reduced to $780 million (₹6,490 crore) from day one. * The company aims to lower its net debt to EBITDA ratio to less than 2.5x over the next four years. * Molycop's reported EBITDA in financial year '25 is $173 million (₹1,439.36 crore), expected to lead to $50 million (₹416 crore) of free cash flow after interest and depreciation. * Recent US tariffs are expected to strengthen Tega's position in the US market by creating entry barriers. * According to Mehul Mohanka, this strategic complementary acquisition will establish Tega Industries as one of the world's leading designers and manufacturers of ‘critical-to-operate’ consumables for certain production steps in the mining, mineral processing, and material handling industries.
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Tega Industries Limited filed this with the NSE as a statutory disclosure, categorised under mergers & acquisitions. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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