Blackstone to acquire 12.5 percent equity in International Tractors

October 9, 2012: The US-based private equity investor Blackstone Group has announced its intent to acquire 12.5 percent of International Tractors Ltd (ITL) in a deal that works out to around US$ 100 million (Rs 520 crore). ITL, the flagship company of the Sonalika Group, manufactures a range of tractors under the Sonalika brandname. In India, ITL currently ranks fourth in the pecking order after Mahindra & Mahindra, TAFE and Escorts and has a market share of around 10 percent.

ITL, which has plans to expand its tractor manufacturing capacity from 45,000 units per annum to over 100,000 by 2013, has targeted growth both in India as well as in overseas markets. The company, which has an existing product range of tractors ranging from 20 to 90hp engines, is aggressively looking at entering the US market for high-powered tractors.

L D Mittal, chairman of the Sonalika Group (pictured), says Blackstone’s equity acquisition in the Group will help fund Sonalika’s future acquisition and overseas expansion plans. Talks are underway with three to four companies for auto components in Europe and about two are likely to be wrapped up by next year. Furthermore, four assembly lines are to be set up in Turkey, Algeria, Nigeria and Poland for 90 and 125hp tractors.