Mahindra & Mahindra and ICICI Venture to acquire Metalcastello S.p.A.

02 April 2008

Mahindra & Mahindra Ltd has in consortium with private equity firm ICICI Venture Funds Managements Ltd have entered in to deal to buy out  top Italian gear manufacturer Metalcastello S.p.A from financial investors and the company's top management, for an undisclosed sum. The transaction is subject to receipt of necessary approvals.

The sellers include financial investors who hold 84.7 per cent of which private equity fund Development Capital holds  66.5 per cent. The Metalcastello management holds the remaining 15.3 per cent.

Metalcastello's product portfolio includes complex gears and shafts for use in vehicle transmissions and drivelines, which it supplies to most global original equipment manufacturers in the tractor, off highway and construction equipment segments.

Mahindra group company Mahindra Forgings (MFL) is already one of the leading forging companies in the world and its customer base is complimentary to Metalcastello's customers. The acquisition complements another group company Mahindra Systech's ability to service customers from multiple locations and strengthens its position as global supplier.

Founded in 1952 Metalcastello, based near Bologna, has revenues of around $100 million and ranks among the the top European gear manufacturers, focused primarily on the off-highway segment.

The top management of Metalcastello S.p.A led by its CEO Gabriele Pierotti, whose family has owned the firm for five decades, will stay on after the transaction.