Dec 08, Colombo: Chennai-based Tube Investments of India Limited, a company that specialized in engineering bicycles has entered into an agreement to acquire 80 percent stake in two Colombo-based premium bicycle makers for $3.34 million.
TI Cycles of India, is one of the leading bicycle manufacturers in India, a part of the USD 4.7 Billion Murugappa Group.
The company in a stock market disclosure said on 7th December it entered into an agreement with Mr. Shuyuan Gan, the promoter and 100 percent shareholder of Great Cycles (Pvt) Ltd and Creative Cycles (Pvt) Ltd, both in Colombo to acquire 80 percent stake of the share capital of each company for $3.34 million and a sum equivalent to 80% of the applicable net working capital as on 30th November 2017.
It said the acquisition of the two companies engaged in manufacture of premium bicycles is part of Tube Investments' strategy to secure the backend supply chain in the mass premium and super premium segments of its bicycles division.
Creative Cycles and Great Cycles have manufacturing facilities in the Katunayake Export Processing Zone, Colombo with a capability to produce a wide range of bicycles, from kids to performance cycles, from steel to alloy bikes.
”With this acquisition, we will be able to grow the market for premium cycles and our market share in the premium segment even more aggressively," L Ramkumar, managing director of Tube Investments said.
"We're looking forward to working closely with TI Cycles as an integral part of their global supply chain," Shuyuan Gan, Founder & Director of Creative Cycles & Great Cycles said.
Subject to approvals from the respective authorities and successful completion of all formalities, the acquisition is expected to close by the end of this financial year.