Kirloskar Oil Engines Ltd, which manufactures diesel engines and generator sets, has agreed to acquire Gujarat-based submersible pumpsets manufacturer La-Gajjar Machineries Pvt. Ltd.
Kirloskar, which is backed by Singapore-based private equity firm Nalanda Capital Pte. Ltd, said in a stock market disclosure that the deal will provide it with a strong footprint in the electric pumps segment through La-Gajjar’s Raindrop and Varuna brands of submersible and mono-block pumps.
The company did not specify the exact deal value, but said the final acquisition price will be 7.89 times the earnings before interest, tax, depreciation and amortisation of La-Gajjar for 2017-18. “This acquisition underlines our commitment and focus to consolidate and deliver in the field of energy, water and food,” the company said.
La-Gajjar, which was founded in 1981, was the first Indian company to launch oil-filled motors, and claims to be the market leader in Uttar Pradesh and Odisha. Since 2002, it has also started exporting to West Asian nations. Its net sales for 2016-17 were Rs 400 crore, compared with Rs 317 crore for the previous year.
Incorporated in 1946, Kirloskar Oils, the flagship company of the Kirloskar Group, makes diesel engines, agricultural pumpsets and generators at its four manufacturing units.
The company also claims to have a sizable presence in international markets with offices in Dubai, South Africa and Kenya. It also has presence in Indonesia and Nigeria. Kirloskar Oils posted net sales of Rs 2,875 crore in 2016-17, against Rs 2,454 crore in the previous fiscal year.
In 2011, the company had sold its bearings business division to Pierburg India Pvt. Ltd, the auto component making arm of German engineering group Rheinmetall, for Rs 87 crore.