Opto Circuits to buy firm in Europe for Rs 60 crore

The Bangalore-based Opto Circuits India Ltd, manufacturer of non-invasive healthcare products, has signed a letter of intent to acquire 100 per cent stake in a medical equipment manufacturing company in Europe.

The acquisition will be an all cash deal and estimated to cost Rs 60 crore. "We are presently in the process of completing all the legal formalities as per the regulations prevalent in Europe. The acquisition formalities will be completed by November 15, 2005," Vinod Ramnani, chairman and managing director, Opto Circuits told Business Standard.

Earlier, in a communique to Bombay Stock Exchange the company informed that the European firm is engaged in the manufacture of cardiac stents of various types including drug eluting coronary stents used in critical cardiac care.

Opto Circuits had recently announced that it was looking at acquiring two to three companies in the non-invasive healthcare product segment in the US and had shortlisted two companies in Boston and southern California and also identified the third one manufacturing cardio vascular product in the US.

Ramnani had said that the funds required for the acquisition were being raised either through a GDR (global depository receipts) issue or FCCB (foreign currency convertible bonds) issue. While the board in its August meeting has approved the GDR issue, the company was also exploring an option to go for the second public issue in the Indian market.

"We are considering various options to raise funds. The capital markets in the country are doing well presently and we would like to make use of that," he said.

The company had initially shortlisted a Nasdaq listed non-invasive healthcare manufacturing company in the US and had planned to spend around $12 million for the acquisition. However, the present acquisition in Europe has come as a surprise as it had not planned to acquire a company there.

Ramnani had said that Opto Circuits was also looking at setting up a new joint venture company with a US firm for carrying out dedicated research and development in India. The company, which presently has 32 R&D engineers at its Bangalore plant, aims to increase the headcount over the years. It is in the process of investing Rs 10 crore into its existing R&D centre in Bangalore.