Mahindra to buy majority stake in Turkey’s Hisarlar for $19 mn
A worker cleans a Mahindra tractor outside its showroom on the outskirts of Jammu November 28, 2013. Tractor sales in India rose nearly 29 percent in October from a year earlier, reaching a record high of 94,227 units. REUTERS/Mukesh Gupta (INDIAN-ADMINIS | Photo Credit: Reuters

Mahindra & Mahindra Ltd, India’s biggest tractor maker, said on Friday it has agreed to acquire a 75.1% stake in Turkish farm machinery maker Hisarlar Makina Sanayi ve Ticaret Anonim Sirketi.

The company will invest 71 million Turkish lira ($19 million or Rs 127 crore) to buy the stake, it said in a stock-exchange filing. The deal is likely to be concluded by April, it added.

Mahindra said the deal will help it get a distribution network in Turkey, Europe’s largest tractor market, and strengthen its farm machinery portfolio on the continent. 

This is Mahindra’s second European deal within a year in the farm equipment sector. In March last year, it had agreed to acquire a 35% stake in Finland-based harvester maker Sampo Rosenlew Oy for up to $20.5 million.

Pawan Goenka, managing director at M&M, said the Hisarlar acquisition is part of the company’s globalisation game plan. “Our strategy going forward is to globalise aggressively and also expand our portfolio to include various new categories of farm machinery,” he said in a statement.

The deal is subject to regulatory approvals in Turkey, Germany and India.

As per the deal, the European Bank for Reconstruction and Development will own a 18.7% stake in Hisarlar and the founding Turker family will hold 6.2%.

Darby Converging Europe Fund, the third European fund launched in 2011 by private equity firm Darby, will exit its investment.

Hisarlar was incorporated in 1977. The company is a key player in Turkey’s agriculture machinery industry. It also makes tractor cabins and components for off-highway machinery. 

The company’s revenue in 2015 was 208 million Turkish lira. Exports constitute around 35% of sales. It has two production facilities in western Turkey and employs about 820 people. Hisarlar has about 45% share of the soil preparation equipment segment in Turkey. It has 85 dealers across Turkey. 

Mumbai-based boutique investment bank Singhi Advisors and Istanbul-based Odin Financial Advisors represented Hisarlar in the transaction.

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