India's mergers and acquisitions bandwagon is on a roll. Here are some of the M&A deals that were struck in the last 24 hours.
Apollo lines up Rs 300-mn buy
Apollo Hospitals is all set to invest Rs 30 crore (Rs 300 million) to acquire a 51 per cent stake in Imperial Cancer Hospitals and Research Centre, which is setting up a 220-bed multi-speciality hospital in Bangalore.
Apollo is to manage the 220-bed hospital and also lend its name. The hospital has envisaged a project outlay of Rs 98.8 crore (Rs 988 million). The whole deal is subject to a due diligence by Apollo, said Suneeta Reddy, director - finance, Apollo Hospitals. The hospital is ready but has not yet been commissioned.
For the moment, it would serve as Apollo's hub in Karnataka where it has only a thin presence.
This deal comes on the heels of Apollo's recent investment -- of about Rs 37 crore (Rs 370 million) -- to expand its reach. The current round of Apollo's expansion has been fuelled by its $70 million global depository receipts issue.
Ahead of the GDR issue, Reddy said, the company aimed to expand its hub-and-spoke model. Here a sophisticated tertiary centre would function in sync with the group's less sophisticated hospitals in the region.
The current leg of expansion has come after a short period when Apollo concentrated on managing hospitals for others. Thus, the company limited the extent of its capital expenditure.
The move to manage others' hospitals, Reddy felt, cannibalised Apollo's growth. Apollo Hospitals gets a return of about 20 per cent on the capital deployed in its business, while returns that came through managing hospitals for others were significantly lower, she added.
Opto in Rs 600-mn German deal
Bangalore-based Opto Circuits India (OCIL), a leading non-invasive healthcare equipment manufacturer, has acquired a German company EuroCOR GmbH for euro 11 million (approximately Rs 59.91 crore).
EuroCOR is into designing and manufacturing of stents. Vinod Ramnani, chairman and managing director of OCIL, said the acquisition of EuroCOR gave the company a strong foothold in the global stents market.
The total global market for stents was valued at $6 billion (Rs 27,750 crore) in 2004. It is expected to rise to $10 billion (Rs 46,250 crore) by 2008.
"We expect that the strong R&D base of EuroCOR will lead us to greater market share and also better margin business. This acquisition is another milestone for Opto Circuits, and will help improve shareholder value," Ramnani added.
According to Michael Orlowski, director and CEO of EuroCOR, it has presence in more than 26 countries. The company has the Europen quality approval for its products and is in the process of applying for Food and Drug Administration (FDA).
EuroCOR's current order book is to the tune of euro1.7 million (Rs. 9.26 crore) and it is expected to report a topline of approximately euro 4 million (Rs. 21.78 crore) in the current financial year. EuroCOR is projecting a topline of Euro 10 million (Rs. 54.46 crore) for its next year.
Opto Circuits' product profile includes digital thermometers, sensors, probes, pulse oxymeters, patient monitoring systems and innovative products in the pipeline. In 2001, OCIL acquired 60 per cent stake in advanced micronic devices to market its equipments in India.
M&M to pick 88% in Plexion
Mahindra & Mahindra has entered into an agreement to acquire 88.41 per cent stake in Plexion Technologies, Mauritius from its promoters, J P Morgan group. The remaining stake in Plexion is held by the promoters.
Although the company did not divulge the financial details of the deal, informed sources pegged it at $10 million (nearly Rs 46 crore).
Plexion is engaged in the business of computer aided engineering services. The company has operations in Asia, Germany, UK and the US.
It is focused on aerospace and automotive Engineering Business verticals and its delivery model includes offshore and onsite services. I-Sec is the advisor to M&M.
Hemant Luthra, president, Mahindra Systems and Automotive Technology Sector, of M&M said: "The acquisition of Plexion complements the capabilities of MES and provides additional resources that can be brought to bear to meet the increasing needs of OEM's like International Truck and others."
M K Padmanabhan, MD and founder of Plexion, said the partnership with M&M will facilitate the injection of capital and skills to address the growing needs of the Aerospace vertical that the company pioneered.
