Mumbai-based Nitin Fire Protection Industries Ltd has sold a 60% stake in its cylinder manufacturing business to US-based Worthington Industries Inc. in a $21-million deal. Worthington will pick up the stake in Nitin Cylinders Ltd (NCL) which will now work as a joint venture between the two companies.
Nitin Cylinders is one of the largest manufacturer of CNG cylinders in India in terms of capacity. The company manufactures high pressure seamless steel cylinders ranging from 232 to 406 mm dia, which it says is among the broadest range in Asia. These are used in compressed natural gas (CNG) storage in motor vehicles and compressed industrial gas. Nitin Cylinders has annual sales of $11 million.
Nitin Cylinders has a manufacturing facility at Visakhapatnam Special Economic Zone, Andhra Pradesh with an installed capacity of 500,000 cylinders per annum. It sells cylinders in UAE, Pakistan, Bangladesh, UK and Malaysia. Ernst & Young acted financial advisor to Nitin Fire Protection Industries Ltd.
The share price of Nitin Fire Protection was up by 8.22% at 10;19 AM today, trading at Rs 84.3. It hit a high of Rs 85.45 per share in morning trade.
“The partnership will help Nitin Cylinder benefit from the global experience and technical capabilities of Worthington Group and will help the business grow for CNG and Industrial Cylinders domestically and in international markets,” said Nitin Shah, Chairman of the Nitin Group.
“Our Nitin partnership will give us the opportunity to expand our global presence in the emerging market of India. This joint venture will also strengthen our product offering in the growing clean power storage market as alternative fuel use gains momentum internationally for economic and environmental reasons,” said Harry Goussetis, President, Worthington Cylinders.
Worthington Industries is a diversified metals manufacturing company with 2010 fiscal year sales of approximately $1.9 billion. The Ohio based company manufactures pressure cylinders, light gauge steel framing for commercial and residential construction, framing systems and stairs for mid-rise buildings among others. Worthington employs approximately 6,500 people and operates 65 facilities in 11 countries.