KEC International, an RPG Group company, has signed a definitive agreement to acquire Texas-based SAE Towers Holdings for $95 million (Rs 443 crore). The company will be acquired on a cash-free, debt-free basis from an entity affiliated with ACON Investments, a US-based private equity firm. The acquisition will be funded through internal accruals and debt.
SAE Towers is a manufacturer of steel lattice transmission towers, with an annual production capacity of 100,000 metric tonnes. Its manufacturing plants are in Brazil and Mexico.
KEC International, a power transmission engineering, procurement & construction (EPC) company, feels the acquisition will offer operational synergies in terms of procurement, testing, and pre-qualification processes.
“The revenue per tonne is much higher in the business from Mexico and Brazil. Profit margins in these geographies are much higher, even though the cost of production is low in India,” said Ramesh Chandak, CEO, KEC International.