The Hindu Business Line : Minda group scouts for acquisitions abroad

Business plans
Close to tying up with Valeo, a leading auto components' supplier in Europe.
Plans to raise Rs 400 crore from internal accruals and term loans for M&As and expansion.

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Bangalore Feb. 13 Auto parts maker NK Minda Group is set to join the rank of several of its Indian counterparts as it closes in to make its first acquisition abroad.

"The group is already in talks in Europe for acquiring some companies primarily in its own product range of electrical auto components," the Managing Director, Mr N.K. Minda, told Business Line.

According to sources close to the company, the deal size could be between $65 million and $70 million.

The group, which has a manufacturing plant in Indonesia, is also close to tying up with Valeo, a leading auto components' supplier in Europe with both the companies looking at various options including an equity partnership. "The details of the terms and agreement with Valeo are being worked out and should be finalised in about two weeks' time," Mr Minda said.

For expansion and mergers and acquisition plans, the group plans to raise Rs 400 crore from internal accruals and term loans. "A lot of PE players have also evinced interest in taking a stake in the company. We are closely looking at all the options," Mr Minda said.

Outlining the consolidation plans, the Managing Director said currently Minda Industries Ltd (MIL) the group's flagship, contributes about 50 per cent of the group's revenues. "The thinking is that going forward at least 70 per cent of the revenues of the NK Minda group should come from MIL," he said.

For this the group is taking a hard look at its various businesses and is actively looking at merging some of the synergetic businesses into MIL, he said.

He said Minda Industries is setting up a greenfield venture in Uttaranchal to produce 4.2 million automotive batteries per annum. It has also entered into a technical tie-up with FIAMM SpA of Italy to produce these batteries. These batteries can be placed in a tilted position giving the OEMs the leeway to pay around the engine design, Mr Minda said.