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Private equity backed M&A is back in action. Mahindra & Mahindra, in partnership with Kotak Private Equity, has acquired majority stakes in Australia based aerospace companies Aerostaff Autralia and Gippsland Aeronautics. The total deal size stands at about Rs 175 crore.

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The company will retain the existing management of both the aerospace companies. This is not the first time that Mahindra is strengthening itself into another space with the backing of a PE fund. In 2008, it acquired a 100% stake in Metalcastello S.p.A, a leading Italian independent gear manufacturer with the backing of ICICI Ventures Funds. 

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The general purpose utility vehicle manufacturer is setting up a plant in Bangalore to complement the acquisition and provide dual shoring cost benefits to customers. Mahindra strategised its entry into the aerospace sphere by acquiring engineering design company Plexion Technologies in 2006.

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Aerostaff Australia manufactures metal component and assemblies for aviation, defense and specialised sheet metal industries with markets in North America and Europe. Gippsland Aeronautics designs aircraft with international standards.

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Commenting on the acquisition, Anand Mahindra, Vice Chairman and Managing Director, Mahindra Group, said that the acquisition is "bold and timely" and is supported by the renewed demand for economical air transportation around the world.

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Two significant PE-backed M&A deals which happened in India include the acquisition of VA Tech Wabag GmbH by VA Tech Wabag, a ICICI Venture-backed company; and the acquisition of Italian company Cemp by ABG Motors, a Tano Capital-backed firm. Both the deals happened in 2007. 

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