Oct. 8 (Bloomberg) -- Kavveri Telecom Products Ltd., an Indian supplier of equipment to Ericsson AB and Vodafone Group Plc, plans to spend $30 million to acquire a company each in the U.S. and Europe to tap the more profitable overseas markets.
“One acquisition is at an advanced stage and we may close” it as early as this month, Managing Director Shivakumar Reddy, said in an interview in Bangalore yesterday. “The next deal is expected at the end of the financial year.”
The purchases will help the Bangalore-based company triple its share of overseas revenue to 60 percent from 20 percent, according to Reddy. Kavveri plans to sell convertible warrants and preferential shares to help fund the acquisitions, Reddy said without specifying details. The company has spent 400 million rupees ($9 million) this year to increase capacity to make wireless antennas and radio frequency products.
Net income fell 5.4 percent to 50.7 million rupees in the three months ended June 30 as sales growth slowed to 0.4 percent, according to data compiled by Bloomberg. “Margins overseas are much higher,” Reddy said.
Kavveri’s shares, which have more than doubled this year, fell 1.4 percent to 133 rupees at 3:19 p.m. in Mumbai.
The company also plans to hire 280 more employees to take the total staff strength to 800 by the end of the fiscal year, Reddy said.
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