LG Balakrishnan to buy MM Gears
03 Jul 2009
LG Balakrishnan & Bros (LGB), the Coimbatore-based motorcycle chains manufacturer, has agreed to buy 100-per cent shares of the Coimbatore-based M M Gears, a gear and gear boxes maker. The deal will be subject to satisfactory due diligence.
The cost of acquisition has not been disclosed. MM Gears had clocked a turnover of around Rs12 crore last year, aiming at Rs15 crore this year.
The agreement was signed this Thursday. According to an LGB official, the company's move comes at the right time when MM Gears has an established production facility and a market.
According to MM Gears promoters, R Mylsamy and P Mohanraj, the decision to sell was taken keeping in mind the large capital required to grow the business. Mylsamy would continue as the company's chief of operations.
The gear and gear parts industry has seen fast growth and foreign orders are expected to trickle in.
LGB produces automotive chains, sprockets, tensioners and belts. Its net sales were at Rs507.6 crore in 2008-09, with a net profit of Rs39.14 crore.
M.M.Gears was established in 1995, and manufactures gears and gearboxes, automotive and industrial chains like motorcycle and moped chains, and automotive kits under the popular brand name Rolon.