Kirloskar Oil Engines (KOEL) jumped 4.76% to Rs 245.30 after the company announced its plans to acquire balance 24% stake in Ahmedabad-based La-Gajjar Machineries (LGM).
La-Gajjar Machineries has been engaged in the manufacturing and sale of submersibles and monoblock pumps and pump sets and stainless-steel pumps in the domestic and export markets since its incorporation in 1981. The turnover of LGM for the financial year ended 31st March 2022 as per audited financial statements was Rs 542.18 crore.
The company had acquired 76% stake in LGM in the year 2017 with an agreement that the balance holding will be acquired by KOEL over a 5-year period.
By completing the acquisition as per previously agreed timelines, LGM will become a 100% subsidiary of KOEL.
The acquisition of balance shares of LGM provides KOEL an opportunity to consolidate its shareholding in the company with a strong and established footprint into the electric pump market through its 'Varuna' and 'Raindrop' brand of submersible and monoblock pumps which enables further consolidation of KOEL's strong position in the pump segment.
"This acquisition underlines our commitment and focus to consolidate, grow and deliver in the space of energy, water and food, KOEL said in a statement.
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"With a strong management team in place, LGM will focus on building this business to its real potential, deepening and widening its reach and leveraging KOEL's expertise in channel, service, manufacturing and R&D to build a world class and self-sustaining organization, it added.
The company expects to complete the transaction by 29 September 2022. The final acquisition price would be determined based on the shareholder's agreement and amendments thereof.
Separately, KOEL informed that its board has approved the appointment of Anurag Bhagania as the chief financial officer and key managerial personnel with effect from 22 September 2022.
Anurag Bhagania is a chartered accountant and an MBA in marketing who has joined the company from SKF India, where, as the chief financial officer, he was instrumental in shaping and executing the strategy for sustainable and profitable growth through deep business partnering, He also set-up the Asia- Pacific finance shared services in India.
He has over 25 years of experience across finance and accounting functions including auditing and taxation, financial planning analysis and reporting, compliance & legal, merger and acquisition, corporate governance and investor relations.
Kirloskar Oil Engines is a leader in the manufacturing of diesel engines, farm equipment and generator sets with a sizable presence in international markets.
The company's consolidated net profit surged 153.47% to Rs 81.54 crore in the quarter ended June 2022 as against Rs 32.17 crore during the previous quarter ended June 2021. Sales rose 45.15% to Rs 1191.41 crore in Q1 FY23 over Q1 FY22.
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