Mahindra & Mahindra Ltd has in consortium with private equity firm ICICI Venture Funds Managements Ltd have entered in to deal to buy out  top Italian gear manufacturer Metalcastello S.p.A from financial investors and the company's top management, for an undisclosed sum. The transaction is subject to receipt of necessary approvals.

The sellers include financial investors who hold 84.7 per cent of which private equity fund Development Capital holds  66.5 per cent. The Metalcastello management holds the remaining 15.3 per cent.

Metalcastello's product portfolio includes complex gears and shafts for use in vehicle transmissions and drivelines, which it supplies to most global original equipment manufacturers in the tractor, off highway and construction equipment segments.

Mahindra group company Mahindra Forgings (MFL) is already one of the leading forging companies in the world and its customer base is complimentary to Metalcastello's customers. The acquisition complements another group company Mahindra Systech's ability to service customers from multiple locations and strengthens its position as global supplier.

Founded in 1952 Metalcastello, based near Bologna, has revenues of around $100 million and ranks among the the top European gear manufacturers, focused primarily on the off-highway segment.

The top management of Metalcastello S.p.A led by its CEO Gabriele Pierotti, whose family has owned the firm for five decades, will stay on after the transaction.

"I am delighted to welcome Gabriele Pierotti and his management team into the Mahindra family and look forward to harnessing their expertise in building Systech's Gear vertical to match that of MFL,'' said Anand Mahindra, vice chairman, Mahindra & Mahindra group (M&M)

''Mahindra Systech has the mandate to build globally competitive businesses in selected verticals and this acquisition greatly enhances our capability to do so," he added.

''We expect Metalcastello S.p.A, an outstanding company with a 50 year history of serving its customers profitably, to help replicate in the gear vertical what Mahindra Forgings has achieved in the forgings space,'' said Hemant Luthra, President Mahindra Forgings ''The customer base of both Mahindra Forgings and Metalcastello is complimentary and will enhance the synergies that we are already harvesting."

Mahindra Group holds majority stake in Rajkot-based gear manufacturer Mahindra SAR Transmission Pvt Ltd and this acquisition augments Systech's ability to serve its customers from locations in Italy, the UK, Germany and India.

Pierotti, said, "Metalcastello is a company that has been part of our family for last five decades and I recognise that in order to facilitate its continued growth it needs a strong strategic partner.'' He said that this was the first steps to ''create what should become one of the leading gear companies of the world that can marry our technology with M&M's low cost manufacturing excellence."