Auto component manufacturer Minda Corp has entered into an agreement to acquire 100 per cent equity stake in Panalfa Autoelektrik Ltd (PAL), also an auto component maker, for Rs 27.82 crore (about $4 million), as per a stock market disclosure.
Minda Corp will also pay Rs 6.7 crore (around $1 million) for takeover of loans. Besides, it will infuse Rs 11 crore (around 1.6 million) into PAL.
The acquisition is expected to be completed in five days, the filing said.
Haryana-based PAL manufactures and sells starter motors and alternators. This acquisition is part of Minda's long-term strategy for growth.
“The acquisition of Panalfa Autoelektrik is a strategic one. The benefits from the combination of Pananlfa's high-growth products such as reduction gear starter motors and alternators and Minda Corp's customer base and dealer network are substantial,” said DC Sharma, group chief financial officer at Minda Corp.
“Minda Corp will be able to provide a better reach to new products not only in the international markets but also in India, including in the after-market segment through its strong distributor network of more than 400 dealers,” he said.
PAL’s clients include International Tractors, Escorts, New Holland Tractors, TAFE and Eicher Motors. During financial year 2014-15, PAL registered a turnover of Rs 71 crore.
Post this acquisition, Minda Corp will have 31 operational facilities, including 26 in India. The transaction enables Minda Corp to better service its global OEM and blue-chip customer base.
The acquisition has been financed through accruals and is subject to customary approvals and conditions.