Auto parts maker Lifelong Group said on Wednesday it has acquired troubled automotive after-sales service startup GoMechanic for an undisclosed amount.
The GoMechanic business has been acquired by Lifelong Group, the majority shareholder of the Servizzy consortium, the Delhi-based company said in a statement.
Lifelong Group is an Indian company established in 1985 and has been expanding its presence in the automotive service and repair industry.
The acquisition and new ownership structure of Lifelong Group, an auto parts, medical device manufacturer and e-commerce player, heralds a new phase in GoMechanic’s business.
It noted that the Servizzy consortium, led by Lifelong Group, was the strongest bid in the process to acquire the GoMechanic business under the terms and conditions contained in the agreement.
Financial details about the deal were not disclosed.
In January, GoMechanic co-founder Amit Bhasin admitted errors in financial reporting and subsequently ordered a forensic audit and a business restructuring that would result in the firing of 70% of its more than 1,000 employees.
Nearly two years after raising a whopping $42 million (roughly Rs. 345 crore), GoMechanic falsified its financial accounts by inflating its revenue.
GoMechanic has responded to recent challenges by continuing operations at 800 repair stations and servicing 30,000 vehicles in January.
An official spokesperson of Lifelong Group said: “The acquisition of the GoMechanic business is in line with our strategic vision to integrate Lifelong Group’s proven expertise in the automotive industry. We are focused on continuing to build on GoMechanic’s business foundation and will continue to revolutionize the Indian automotive service and repair industry.”
Lifelong Group got involved in automobile parts manufacturing in 1995, medical devices in 2005, and e-commerce in 2015.
The business’s annual revenue has grown from $500,000 (approximately Rs. 4 crore) in 1995 to $175 million (approximately Rs. 1,440 crore) today, serving major clients in the automotive industry such as Hero Moto, General Motors, Arvin Meritor, Stanley Black & Decker, etc.