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Auto components maker Lifelong Group on Wednesday said it has acquired stressed automobile after-sales service startup GoMechanic for an undisclosed amount.
The GoMechanic business has been acquired by the Lifelong Group as the majority shareholder under Servizzy consortium, the Delhi-based firm said in a statement.
The Lifelong Group is an Indian company established in 1985 and has been looking to expand its operations in the automotive service and repair industry.
This acquisition and new ownership structure with Lifelong Group, a manufacturer of automotive components, medical devices, and a player in the e-commerce space, heralds a new phase for GoMechanic business, it added.
The Servizzy consortium, to be led by the Lifelong Group, emerged as the strongest bid in this process for the acquisition of the GoMechanic Business in accordance with the terms and conditions contained in the agreement, it noted.
Financial details regarding the deal were not shared.
In January this year, GoMechanic co-founder Amit Bhasin admitted to errors in financial reporting, following which a forensic audit has been ordered and a business restructuring undertaken which will see 70 percent of the 1,000-odd workforce being laid off.
Nearly two years after it raised a mammoth $42 million (roughly Rs. 345 crore) in funding, it emerged that GoMechanic cooked its financial books by inflating revenues.
GoMechanic navigated the recent challenges by continuing operations across 800 workshops and servicing 30,000 vehicles in January.
“Acquisition of the GoMechanic business, aligns with our strategic vision of synergising the Lifelong Group’s proven expertise in the automotive industry. We are focused on building upon GoMechanic’s business journey, and will continue revolutionizing the Indian automotive service and repair industry,” a Lifelong Group official spokesperson said.
Lifelong Group diversified into auto component manufacturing in 1995, medical devices in 2005 and e-commerce in 2015.
The business has grown from an annual revenue of $0.5 million (roughly Rs. 4 crore) in 1995 to over $175 million (roughly Rs. 1,440 crore) today and caters to major customers in the automotive industry like Hero Moto, General Motors, Arvin Meritor, Stanley Black & Decker, etc.