Amtek Auto is not stopping after buying out JL French's forging and casting business in UK. NDTV has learnt that the company is planning a buyout in the US, wants to set up manufacturing units in other low-cost emerging markets like Romania, Hungary.
The company has about $500 million as an acquisition budget and it is looking at companies in Lowa, Detroit, Mexico border. JL French's, Metaldyne's casting, forging business in the US could be potential targets. The acquisition could be through its US arms and the deal is expected to be completed within the next three months. When contacted, the management did not deny the news but chose to be diplomatic instead. „It's safe to say that we continue to be an inquisitive organization, exploring strategic opportunities. If the right acquisition comes along then the money is available,” said John Flintham, CEO&MD - Global Operations, Amtek Auto. „But it will have to be the right acquisition. It has to be synergistic with our world organizations and also maximize the low cost base of India,” added Flintham.
Not just India, Amtek Auto wants to set up manufacturing units in other low-cost emerging markets like China, Hungary, Romania and Mexico. Investments worth $10 million have been planned for a greenfield in China in the next one and a half years. The plan is to ride piggyback on existing clients like Ford in China and Renault, BMW, Volvo, Cummins in Europe. „I think its a good move for all these auto components to expand inorganically. It gives them access to technology, new markets and management bandwidth,” said Dipan Mehta, Member, BSE. The Amtek management is busy strategizing its global blueprint. Currently almost 75% of the company's sales come via acquisitions. No wonder, its hunger to grow inorganically is also growing. They have been buying companies at four times EBIDTA. Going forward that can also be scaled up. It had missed an opportunity in the US when it opted out of Thyssen Krupp's assets. However, this time it wants to go for the kill. (ndtvprofit.com)