Daikin Airconditioning India Pvt. Ltd, the local arm of Japan’s Daikin Industries Ltd, has signed definitive agreements to fully acquire air handling unit (AHU) manufacturer Citizen Industries Ltd.
As part of this transaction, Daikin India has also agreed to acquire a Bengaluru-based manufacturing facility owned by Kamalesh Mehta, one of the promoters of Citizen Industries.
The exact value of the transaction couldn’t be ascertained. However, a person aware of the development said it is in the range of Rs 110-Rs 130 crore ($14.9-17.6 million).
Citizen Industries, set up in 1995, makes, assembles and supplies AHUs and related products. These include fans and fan coil units, HVAC (heating, ventilation and air conditioning) and fan coil units, and coils for other HVAC-based applications. It operates manufacturing facilities in Ahmedabad and Bengaluru and employs more than 650 people.
According to VCCEdge, the data research arm of Mosaic Digital, Citizen Industries reported net sales of Rs 108.27 crore for 2018-19 financial year, with losses of Rs 2.28 crore. Daikin Airconditioning India reported net sales of Rs 3,652.43 crore and a profit of Rs 192.06 crore for 2018-19.
As per a report by Japanese news agency NNA, the acquisition will help Daikin India gain a stronger presence in the country, as well as help it produce more products locally.
“The air conditioning market in India was temporarily depressed due to the corona disaster, but commercial air conditioning equipment including air handling units for data centres, healthcare, pharmaceuticals, and factories is expected to expand,” a Daikin India representative said, per the NNA report.
Full-service law firm DSK Legal acted as the legal adviser to Citizen Industries on the transaction while ICICI Securities acted as the financial adviser. Daikin India was represented by Pioneer Legal and KPMG.