Concord Control Systems Limited has made a strategic move into the high-value electronic manufacturing sector by acquiring an 80% stake in Fusion Electronics Private Limited, India's largest flex printed circuit board (PCB) manufacturer. This acquisition marks Concord's entry into a niche, high-value product segment with significant import dependency in India.

Key Highlights of the Acquisition

Strategic Implications

The acquisition aligns with Concord's vision to become a global leader in Electronics Manufacturing Services (EMS) and to build India's most advanced railway ecosystem. By leveraging Fusion's technical expertise and infrastructure, Concord aims to:

1. Enter the flex PCB manufacturing segment, which has limited competition in India.
2. Deepen partnerships with railway industry leaders through integrated electronics offerings.
3. Expand its product portfolio across railway and industrial electronics.

Future Roadmap

Concord has outlined a plan for Fusion Electronics:

• Commercialize the Lucknow facility.
• Double the capacity over the next three years.
• Forward integrate into Surface Mount Technology (SMT), box build, and railway electronics.
• Create a standalone, high-value EMS platform serving strategic sectors.

Transaction Details

The acquisition is being executed through a Share Purchase Agreement (SPA). While the exact financial terms remain confidential, the transaction is expected to be completed within six months. The consideration is in cash, as per the terms of the agreement.

Management Commentary

Mr. Gaurav Lath, Joint Managing Director of Concord Control Systems, stated, "This acquisition is a landmark step towards our vision of becoming a global EMS leader. Fusion's technical expertise, global client portfolio, and advanced infrastructure perfectly align with our ambitions. With this integration, Concord will deliver unmatched quality, faster innovation, and an expanded product portfolio across railway and industrial electronics."

Conclusion

This strategic acquisition positions Concord Control Systems to capitalize on the growing demand for high-value electronic manufacturing in India, particularly in the railway sector. By combining Concord's manufacturing excellence with Fusion's specialized capabilities, the company aims to play a significant role in India's electronic manufacturing landscape and contribute to the country's self-reliance in critical technologies.

Investors and industry observers will be keenly watching how Concord leverages this acquisition to drive growth and innovation in the coming years.

Concord Control Systems Limited has announced a strategic move into the high-value electronic manufacturing services (EMS) sector with the acquisition of a 50% stake in Fusion Electronics Private Limited. This acquisition marks Concord's entry into the niche market of flexible printed circuit board (PCB) production, positioning the company for significant growth in the electronics manufacturing industry.

Key Highlights of the Acquisition

• Stake Acquired: 50% equity stake in Fusion Electronics Pvt. Ltd.
• Transaction Details: Cash consideration, to be completed within six months
• Strategic Importance: Entry into flex PCB manufacturing and high-value EMS sector
• Target Company Profile: Largest flex PCB manufacturing unit in India with over 31 years of experience

Fusion Electronics: A Strategic Asset

Fusion Electronics brings a wealth of experience and capabilities to Concord Control Systems:

• Manufacturing Capacity: 200,000 square meters annually
• Revenue Potential: Approximately ₹200 crore+ at full capacity
• EBITDA Margin Potential: Over 20%
• Expertise: Flex roll-to-roll, rigid panel, and flex panel processing

Strategic Rationale and Future Outlook

The acquisition aligns with Concord's vision to enter sunrise electronic manufacturing services and create a high-value EMS platform serving strategic sectors. Key points include:

• Leveraging Concord's engineering precision and manufacturing excellence
• Focus on high-margin, import-substitution products
• Deepening partnerships within the railway industry
• Plans for capacity expansion and forward integration

Roadmap for Growth

Concord has outlined an ambitious plan for Fusion Electronics:

• Short-term Goal: Commercialization of the Lucknow facility before the end of the fiscal year
• 3-Year Vision:
  • Double the current capacity
  • Forward integration into SMT, box build, and railway electronics
  • Establish a standalone, high-value EMS platform for strategic sectors

Management Changes

As part of the acquisition:

• Mr. Sameer Mehan has resigned from the directorship of Fusion Electronics
• New directors appointed: Mr. Gaurav Lath, Mr. Nitin Jain, Mrs. Pankhuri Lath, and Mrs. Mahima Jain

Market Implications

This strategic acquisition positions Concord Control Systems to capitalize on the growing demand for flexible PCBs and high-value electronic manufacturing services in India. The move is expected to strengthen Concord's position in the railway ecosystem while opening up new avenues for growth in automotive and industrial electronics sectors.

The transaction underscores Concord's commitment to innovation, self-reliance, and growth in India's electronic manufacturing landscape. Investors and industry observers will be watching closely to see how this acquisition unfolds and impacts Concord's financial performance in the coming quarters.