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November 18, 2005

INDIA: Mahindra Systems in acquisition splurge

The automotive supplier subsidiary of the diversified Mahindra & Mahindra (M&M) Group - Mahindra Systems and Automotive Technologies (MSAT) - is believed to be close to acquiring an Indian and three European companies to speed its growth.

The automotive supplier subsidiary of the diversified Mahindra & Mahindra (M&M) Group – Mahindra Systems and Automotive Technologies (MSAT) – is believed to be close to acquiring an Indian and three European companies to speed its growth.

The pending acquisitions include small companies with sales in the range of US$30-50m each in the area of forging, gears and engineering services. This strategy is aimed towards quadrupling MSAT’s current sales and reaching the company target of $1bn in sales in the next five years.

Chief executive officer Hemant Luthra said: “We are expecting to acquire all four companies by the end of this financial year. I would be disappointed if we are unable to complete acquisition by the year end.”

The company declined to disclose the purchase prices of the target firms but indicated that the valuation was estimated on the basis of 5-10 times EBIDTA or 0.3 times sales.

MSAT said the company has been invited to bid for Delphi’s assets by investment bankers but has not made any decision.

Deepesh Rathore/Tilak Swarup

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