Sintex Industries gets ready for another acquisition

Earmarks Rs 595 crore for a company in composites space.

Gujarat-based Sintex Industries, which has been aggressive in its acquisition strategy in the last one year, is on the lookout for another buy.  It is scouting for companies in the composites space and has earmarked $150 million (around Rs 595 crore) for the same.

The company, known for its range of water tanks, had diversified into composites, monolithic constructions and pre-fabricated structures business in recent times, for which it had taken the inorganic route on earlier occasions.

For its latest acquisition plan, Sintex has already identified target companies in Germany, Italy, Sweden and North America.

"The target companies are large conglomerates operating in 9-10 countries with 20-30 manufacturing plants across several continents," says Amit Patel, managing director of Sintex Industries.

While negotiations are still on, Patel is confident of wrapping up the latest buy by the end of 2008.

The company is planning to raise $300 million (around Rs 1,190 crore) through FCCBs in the coming months to fund the acquisition.

This isn't the first time that Sintex had looked at the composites space for acquisitions.  In June 2007, it had acquired US-Based Wausaukee Composites, which was into the plastics and textiles business.

Later, in October same year, it acquired France-based Nief Plastic, a player in plastic injection moldings and thermosets. The company followed it up with the acquisition of Nero Plastics Inc through Wausaukee Composites mc, US, Sintex's downstream subsidiary.

The company is focusing on the composites segment, as according to Patel, the market for composites in India would touch Rs 1,000 crore in 2007-08 and Rs 4,000 crore by 2011.

The company is seeing a 30 per cent growth in revenues in composites on the back of increased demand for high-performance products such as aerospace components, boats, bicycle frames and racing car bodies, he said.