The Ahmedabad-based Sintex Industries, which manufactures plastics and textiles, will acquire an European company for euro 40 million before March end.

Talking to Business Standard, Sintex Managing Director Amit Patel said, "We have zeroed in on an European company and are very close to (finalising) the deal." Patel declined to divulge the name of the company citing the confidentiality the company has to maintain till the deal is concluded.

An electric engineering and auto ancillary company, the multi-location European firm is unlisted and has manufacturing facilities in Italy, Germany and France.

Patel had earlier said that Sintex was in talks with four firms -- three in Europe and one in the US.

The company's plan for the US acquisition is still on. "The acquisition might take some time," Patel said. The company has it presence in the US through third party distribution channel.

The enterprise value of the European company is worth euro 40 million and it will fund the acquisition from its investments worth Rs 550 crore (Rs 5.5 billion), Patel said.

A spokesperson for Sintex Industries said the acquisition is a strategic move as the foreign firm has a pan-Europe presence with good clientele, many of whom are from Fortune 500 companies.

After the acquisition, Sintex will undertake a major portion of the European firm's manufacturing at its various facilities in the country. Final processes like assembling or distribution of the auto or electric parts will be carried out at the European plants.

Patel said the company had an eye out in the domestic market also and was is in the process of acquiring electric engineering and auto ancillary based companies.

The company seems to be now interested in picking up some local companies to fuel its growth. "The domestic acquisition is a new add-on to our ongoing (overseas) expansion plans," Patel clarified.

In its recently declared third quarter result, the company has seen an increase in its net income earning by 35 per cent, while registering net income of Rs 284.6 crore (Rs 2.84 billion) for the Q3 FY06-07 compared to Rs 210.3 crore (Rs 2.1 billion) in the year-ago period.

The net profit rose by 27 per cent from Rs 20.4 crore (Rs 204 million) in last Q3 FY05-06 to Rs 25.9 crore (Rs 259 million) in current Q3FY06-07.