Kavveri readies 3rd buy abroad

Company expects to wrap up the all-cash deal by December.

Bangalore-based Rs 50-crore Kavveri Telecom Products Limited, a manufacturer of antenna and radio frequency products for wireless industries, is readying its third acquisition overseas.

The company had acquired two companies in Canada "" Til-Tek Antennae Inc in 2006 and DCI Digital Communications in April 2007).

Said C Shivakumar Reddy, managing director, KTPL, "We have shortlisted two companies manufacturing radio frequency (RF) products and base station antennas in the eastern and western part of the US. The talks are in an advanced stage and we hope to close the deal by the end of December 2007."

He said KTPL is likely to shell out $7-10 million each for these acquisitions that will help the company grow its business both in India and abroad.

"We have learnt that these two companies that we are trying to acquire will give us access to new technologies and products apart from a ready customer base in the US. We hope to realise our cost of acquisition in the next three years," Reddy told Business Standard.

The acquisition will be an all-cash deal and the company has arranged a line of credit for the same, he said.

Meanwhile, the company is planning to commission its new manufacturing facility at Jigani on the outskirts of Bangalore for an investment of Rs 15 crore.

The facility, spread over 120,000 sft, will have a capacity to produce over 100,000 base station antennae per year or products worth Rs 350 crore per annum. It will also shift the manufacturing capabilities out of its existing two facilities in Bangalore to the new factory, Reddy said.

He said the company was likely to exceed its target of Rs 100 crore sales turnover during the present fiscal and end with a turnover in excess of Rs 170 crore.