After the acquisition, Daifuku would establish the entire factory and distribution automation (FA&DA) manufacturing operations, that include a bigger factory
Daifuku Co., Ltd, a material handling equipment supplier based in Japan, has acquired Vega Conveyors and Automation – a Hyderabad-based warehouse automation firm, for an undisclosed amount.
Post-acquisition, Vega will become a fully-owned subsidiary of Daifuku Co. However, Vega’s managing director Srinivas Garimella, who is also the promoter of the company, will continue to lead as part of the agreement, which also include an earn-out package.
The term ‘earn-out package’ refers to a pricing structure in which a part of purchase price is determined on the business performance following the acquisition. This comes in the backdrop of development growth in warehousing infrastructure in India.
After the acquisition, the Japanese firm would establish the entire factory and distribution automation (FA&DA) manufacturing operations, that include a bigger factory at the existing manufacturing facility of Vega in Telangana.
Expansion of business
Commenting on the development, Kanji Anno, Managing Officer and General Manager – FA&DA global operations at Daifuku, said, “Consolidating our expertise and capabilities with Vega will allow for the expansion of our manufacturing and distribution business segments within Asia.”
In 2016, Daifuku established a sales office in Mumbai for FA&DA division of its Indian arm – Daifuku Indian Private Limited. As there is a need to manufacture and ship products directly from Japan to its Indian customers, Daifuku found an appropriate target in the form of Vega to expand its business and manufacturing foot print in the country.
Apart from providing material handling equipment like automated guided vehicles, Vega Conveyors and Automation also offers software related to warehouses such as WCS/WMS, which are designed and developed at the company’s facility in Pune.