Blackstone Capital Partners (Singapore) VI, a Blackstone Group affiliate, is to acquire 12.5 per cent of International Tractors Ltd for up to Rs 520 crore ($100 million) in a structured transaction. The amount is to be invested in tranches.
Last year, the tractor company was looking to acquire Europe-based tractor manufacturer and was in talk with PE players to raise around Rs 450 crore.
International Tractors Ltd had also raised private equity funding from JM Financial, Citi Venture Capital International and 3i Group Plc.
The flagship company of the Sonalika Group, International Tractors Ltd manufactures tractors under the brand name Sonalika. The $100-million investment values the flagship company of the Sonalika Group at approximately Rs 4,200 crore.
Incorporated in 1995, the company, which has manufacturing facilities located in Punjab and Bihar, has grown to have an annual turnover of $500 million. It currently has a 10 per cent share of the domestic tractor market. L.D. Mittal, Chairman, ITL, said, “Blackstone in India has an exceptional track record in partnering with companies during their growth phase.
“We have already witnessed the value addition that they bring to us. Their strategic inputs will further enable us to achieve our ambitious growth plans. In addition to helping us scale up our operations, this deal will provide us access to Blackstone’s global best practices.''
Akhil Gupta, Senior Managing Director and Chairman of Blackstone India, said: “ITL is intrinsic to India’s efforts in enhancing agricultural productivity and enriching its farmers.
“Favourable macro economic trends such as rising minimum support prices and rising labour costs are leading to increased adoption of mechanisation by farmers.”
Incidentally, this is Blackstone's second agriculture-related investment in India. Earlier, it had invested $54 million in Hyderabad-based Nuziveedu Seeds Ltd, which is the country’s largest hybrid cotton seed company.
Amritanair.ghaswalla@thehindu.co.in