The acquisition is expected to be finalised in the next one-and-a-half months.
The deal size could be up to Rs 100 crore, Bajaj Electricals chairman and managing director Shekhar Bajaj said.
Bajaj Electricals is eyeing companies that are strong in manufacturing and has a good product line, but are weak in financials.
Initially, Bajaj Electricals would acquire around 51 per cent stake in the company and infuse money to rejuvenate the company. "We will look after the financials and marketing to rejuvenate the company," Bajaj said.
There are no merchant bankers involved the deal and the negotiations are being done by the company officials. The acquisition would be funded mostly through internal accruals.Bajaj produces electrical goods ranging from fans to lighting and geysers.
During 2007-08, the company will be pumping in Rs 30 crore for enhancing highmast lighting and galvanising capacity from 30,000 to 50,000 tonne at Ranjangaon near Pune in Maharashtra. The higher capacity of the high mast plant would help in total substitution of imports from the UK and West Asia till now.
The plant would also cater to the hot dip galvanising needs of the infrastructure sector, particularly in Maharashtra and neighbouring states.