Aeroflex Industries jumped 5.27% to Rs 137.90 after the company said that its board has approved to acquire 100% of the issued and paid-up share capital of Hyd-Air Engineering from the existing shareholders of the investee company.
Hyd-Air Engineering is a manufacturer of hydraulic fittings, fluid connectors & flanges, etc. The companys provisional turnover for FY24 is Rs 8.06 crore.
Aeroflex stated that the acquisition is being made to use Hyd-Airs products as components and fittings to boost the sales of its assembly products business; increase its product portfolio; and dive deeper into sectors such as railways and shipbuilding and other heavy industries.
The company expects to conclude the acquisition within a period of 60 days from the date of execution of share purchase agreement.
Aeroflex has acquired 100% shareholding in Hyd-Air for a cash consideration of Rs 17.20 crore. The company further plans to invest approximately Rs 18 crore in Hyd - Air to increase the production capacity over next 2-3 years.
Asad Daud, managing director of Aeroflex, said: "The approval from our board marks a significant milestone as we move forward with the acquisition of Hyd-Air Engineering Priviate Limited.
Furthermore, the synergy between Aeroflex's R&D capabilities and Hyd-Air's expertise promises to enrich our product offerings, fostering innovation and bolstering our competitiveness in the market.
This strategic move not only opens pathways for our entry into critical sectors like railways, shipbuilding, and heavy industries but also positions Aeroflex for significant growth in sales and EBITDA margins by expanding our assembly product offerings. The acquisition of Hyd-Air strengthens our market position and sets Aeroflex on a path for long-term success."
Aeroflex Industries manufactures stainless steel corrugated flexible hoses and assemblies at its factory in Navi Mumbai, Maharashtra.
The company had reported a net profit of Rs 9.04 crore (up 75.56% YoY) and total income of Rs 74.32 crore (up 12.78% YoY) for the quarter ended on 31 December 2023.
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