Titagarh Wagons acquires Italian metro coach maker Firema Trasporti

Kolkata-based railway wagons manufacturer Titagarh Wagons Ltd has acquired Italian passenger and metro coach manufacturer Firema Trasporti SpA for an undisclosed amount, marking its foray into metro coach and high-speed manufacturing, according to a stock market disclosure.

Titagarh Wagons will shell out about €20-25 million (approximately $27.3 million) for the acquisition, further investment and operations of the company, it said.

The transaction includes transfer of technology, tangible and intangible assets and some liabilities relating to ongoing orders, it said in the statement.

The Indian firm is now planning to participate in upcoming tenders for manufacturing metro coaches both at the home turf as well as globally.

Meanwhile, Titagarh Wagons has also garnered Rs 150 crore through issuance of equity shares by way of qualified institutional placement (QIP).

“Part of the proceeds will be used to upgrade Indian coach manufacturing facilities to absorb the technology from the newly acquired unit, and cater to the booming Indian market for metro coaches and other trains,” it said.

The acquisition was done through a special purpose vehicle (SPV) named Titagarh Firema with a capital base of €10 million incorporated in Italy. Titagarh owns 90 per cent stake in the SPV, while remaining 10 per cent is held by Italian partner Adler Plastics.

Founded in 1993 by the merger of eight companies, Firema was put under Italian bankruptcy administrators in 2010. Firema manufactures railway rolling products and has knowhow on metro and high-speed train sets with speed up to 160 kms per hour, spanning both electric and diesel. 

"The acquisition of Firema's business will complement Titagarh's growth strategy and will add significant value to Titagarh's existing business as well," Titagarh Wagons vice-chairman and managing director Umesh Chowdhary said.

Lodha Capital Markets Ltd acted as financial advisor to Titagarh Wagons Ltd on the transaction.

Founded in 1997, Titagarh manufactures railway wagons, bailey bridges as well as heavy earth-moving and mining equipment.

This is Titagarh Wagons' second overseas acquisition in the last five years. Earlier in 2010, it had acquired France-based Arbel Fauvet Rail (now Titagarh Wagons AFR) for an undisclosed amount.

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