Tech Mahindra to buy Italian car designer for ₹248 crore

Our Bureau Mumbai | Updated on January 22, 2018 Published on December 14, 2015

Italian engineer and designer Paolo Pininfarina (second left) poses with Chief Executive Officer and Managing Director of Tech Mahindra CP Gurnani (second right), Pininfarina CEO Silvio Angori (left) and CFO Gianfranco Albertini (right) in downtown Turin, northern Italy, on Monday. -- Reuters

Tech Mahindra, along with its parent Mahindra & Mahindra, has signed a deal with Pincar Srl to acquire a controlling stake in Pininfarina SpA, an Italian automotive brand and industrial designer, for about €33.5 million (₹248 crore).

Formed in 1930, Pininfarina was contracted by brands such as BMW, Ferrari, Alfa Romeo, Peugeot, Fiat, GM, Lancia and Maserati. Since 1980, the company has designed high-speed trains, buses, trams, airplanes and private jets.

Open offer

The acquisition, to be executed through a special purpose vehicle, will buy 76.06 per cent stake from the promoters at €25.3 million, at a price of €1.1 a share. Tech Mahindra will invest 60 per cent while M&M will infuse the remaining capital.

The SPV will also make an open offer to acquire an additional 23.94 per cent at €1.1 a share from shareholders of Pininfarina, said the press statement of the company.

Once under the belt, the SPV will infuse €20 million into Pininfarina by way of rights issue. As part of the composite deal, both Tech Mahindra and M&M will sign a corporate guarantee of about €114.5 million to the lenders, creditors, and lessors of Pininfarina. Both the companies will also work with lenders to restructure the debt on books.

In 2014, revenue of the company was €86.6 million and EBITDA was €7 million. Currently, it employs 650 people. The company will operate as an independent entity, led by present chairman Paolo Pininfarina and remain listed on the Milan Stock Exchange, said Tech Mahindra in a statement.

Anand Mahindra, Chairman of Mahindra Group, said given the increasing design sensibilities of consumers, Pininfarina will play a key role in product design.

Published on December 14, 2015
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