Rane (Madras) Ltd has announced plans to acquire US-based Precision Die Casting Inc (PDC) to expand its presence in the overseas markets.
The Board of Rane (Madras) on Monday approved the acquisition of the entire equity of the US company which makes high pressure aluminium die casting for automotive applications such as steering and compressors.
The acquisition and subsequent investments in the target company will be through a wholly-owned subsidiary which is being incorporated in the Netherlands, according to information provided by the Rane group company to the BSE. On the cost of acquisition, it said that the enterprise valuation of PDC is $8.9 million (₹59 crore) and the cost of acquisition of entire equity is at $1 (₹67).
Following the acquisition, the company plans to invest $2 million (₹13.4 crore) as equity through the Netherlands subsidiary to improve operations and turn around. The US company has an annual turnover of about $29 million (₹194 crore).
The draft share purchase agreement has been finalised and subject to formalities, the transaction will be completed in the current financial year.
Q3 performance Rane (Madras), a ₹780-crore company, is part of the Rane Group, which has significant presence in making auto components. For the quarter ended December 31, 2015 the company reported a net profit of ₹3.19 crore on a total income of ₹204.51 crore. During the corresponding quarter previously the company reported a net profit of ₹ 2.52 crore on an income of ₹196.85 crore.