Mahindra Systems plans slew of buyouts

Mahindra Systems and Automotive Technologies (MSAT), the auto ancillary arm of Mahindra & Mahindra (M&M), is close to acquiring a domestic and three European firms.

The target companies are into forging, engineering services, and gearing business and have a turnover of $30-50 million each.

The proposed acquisitions are in line with the company's plan to quadruple its sales in five years to $1 billion.

"We are expecting to acquire all the four companies by the end of this financial year. I would be disappointed if we are unable to complete acquisition by the year end," said Hemant Luthra, chief executive officer, MSAT.

He said all the companies have "good management, flexibility in approach, good technology, economy and are profitable."

He, however, declined to indicate the price at which he would take over the companies. He said the valuation estimated for the companies would be on the basis of 5-10 per cent of EBIDTA or 0.3 times the sales.

On whether the company was looking at bidding for Delphi's assets, Luthra said investment bankers had approached the company but it has not taken a decision on the issue. "Investment bankers have come to us but we have not got into details as yet," he said.