| The subsidiary will initially have an investment of Rs 20 crore
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| Kirloskar Brothers, India’s leading pump manufacturer, is looking at setting up a special purpose vehicle (SPV) overseas to expand its business through acquisitions.
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| The new company would be a 100 per cent subsidiary of Kirloskar Brothers, with an investment portfolio of Rs 20 crore in the initial stages.
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| “About 5 to 6 European companies in the pump manufacturing sector had approached us to manage their operations some time back. Therefore, we felt that a separate company should be set up to handle such kind of operations,” said Sanjay Kirloskar, chairman & managing director, Kirloskar Brothers.
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| “We are looking at financing the company through internal accruals as well as other options,” Kirloskar said.
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| The new company is expected to enhance the existing operations of the company. “We export quite a bit to the European and the US markets, therefore it makes sense for us to have centres in these markets,” said Kirloskar.
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| Kirloskar Brothers exported almost 30 per cent of its total production in 2002-03, which amounted to an export turnover of Rs 58.5 crore.
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| “We will not only look at marketing our products through these companies, but also utilise and integrate their manufacturing facilities,” added Kirloskar.
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| “We have conducted due diligence on some companies already, and will be talking to them regarding the proceedings soon,” said Kirloskar.
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| The companies that have been short listed for acquisitions are mainly privately owned.
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| However, he declined to disclose the location of the subsidiary. “We’ve been considering this proposal for some time now, but haven’t taken a final decision yet. It could take between 6 months to a year before something concrete can be said,” said Kirloskar.
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| Considering that the potential acquisitions were in the European markets, the subsidiary could be set up there around, he added. |
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