Nalanda Capital-backed Kirloskar Oil Engines Ltd is selling its bearings business division to Pierburg India Pvt Ltd, the auto component making arm of German engineering group Rheinmetall, for Rs 87 crore.
The division has units in Pune and Ahmednagar and the deal involves sale of assets, excluding the land and building on which the business is housed, as a going concern on a slump sale basis, on a cash free and debt free basis.
At one time, the largest German manufacturer of carburettors, Pierburg was acquired by Rheinmetall in 1986. It followed a corporate takeover dispute between an existing shareholder Bosch and engineering giant Siemens. Bosch prevailed over Siemens but was unable to exercise a contractual first right of purchase as Rheinmetall took over the 80% Pierburg family stake in the company. It acquired the balance 20% owned by Bosch three years later.
Pulak Prasad-led Nalanda Capital had part exited with a multibagger from Kirloskar Oil Engines mid-2010. The Singapore-headquartered private equity fund, that invests in Indian listed companies, sold around 0.15 million shares it held in the company (before a capital restructuring) with an estimated return of around 4x in less than two years, as per VCCircle estimates.
Nalanda India Fund held 6.8% stake as of December 31, 2010 in Kirloskar Oil Engines that manufactures diesel engines, irrigation pumpsets, diesel generating sets, engine bearings and valves besides grey iron castings. The Indian engineering firm had recently undergone a restructuring that involved demerger of engine and auto component business from the firm into another group firm Kirloskar Engines India that has now become Kirloskar Industries.