Mahindra soars into the aerospace segment; Acquires majority stake in two Australian companies

Mahindra today announced two landmark aerospace deals with the simultaneous acquisition of a majority stake in two Australian companies, Aerostaff Australia and Gippsland Aeronautics.

This move signals Mahindra’s strategic entry into the global aerospace components and the general aviation markets, and continues the commitment it made to this industry in 2006, with the acquisition of Engineering Design Company, Plexion Technologies.

The acquisitions of Aerostaff Australia and Gippsland Aeronautics have been made jointly with Kotak Private Equity with a total commitment of about Rs 175 Crore.

Aerostaff Australia (AA) is a component manufacturer of high-precision close-tolerance aircraft components and assemblies for large aerospace OEMs. AA’s acquisition will help catapult M&M into the burgeoning Defence Offset and Commercial Aviation market.

Gippsland Aeronautics (GA) is an established brand in general aviation and has delivered more than 200 FAR 23 certified planes in 32 countries. The FAR 23 certification is mandatory for carrying fare paying passengers and signifies the highest level of’ passenger safety. GA’s acquisition signals Mahindra’s entry into the 2 – 20 seater, turbo prop market, which is amongst the fastest growing segments in general aviation. Turbo props provide operational adaptability in environments with relatively poor infrastructure and are noted for their ability to serve the market at the lowest cost per passenger seat kilometre.

Mahindra will retain the existing managements of GA and AA, securing the services of the founders who developed this technology. A plant is being set up in Bangalore to complement these acquisitions and provide dual shoring cost benefits to customers.

GA’s product portfolio also complements the NM5, which is being jointly developed by Mahindra with the National Aeronautics Laboratory (NAL)- another first in public private partnership.

Mr. Anand Mahindra, Vice Chairman and Managing Director, Mahindra Group, said, “M&M’s move into the Aerospace segment is deliberate, bold and timely, and is supported by a renewed demand for economical air transportation around the world. Our investment in component capability addresses the growing needs of both the civil and defence markets.”

Hemant Luthra, President, Systech Sector and Member of the Group Management Board, Mahindra & Mahindra, added, “I am delighted that the M&M Board has endorsed our strategy to extend our Art to Part strategy from Systech to a promising new vertical.”

Expressing their collective delight, Stephen Roebuck, MD, AA, and George Morgan, Founding Director, GA, added, “Both organizations will benefit enormously as a result of their association with Mahindra, given its strong global brand, impeccable standards of corporate governance and its ability and willingness to expand both component facilities and the GA product line-up.”

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