Purchase of Cummins Power Rental business in India and disposal of European Oil-Free Compressed Air business
Aggreko PLC, the world leader in power rental, temperature control and oil-free compressed air services, announces that it has signed agreements on two transactions.
- The first involves the purchase of the business and assets related to power rental of Cummins in India.
- The second involves the sale of Aggreko's European oil-free compressed air ("OFA") rental business to Atlas Copco.
The purchase of the power rental business of Cummins India Ltd (CIL) is for a total consideration, payable in cash on completion, of INR291 million (GBP3.9 million) and is subject to the approval of CIL's shareholders. The business being acquired is forecast to have revenues in 2008 of about INR179 million (GBP2.4 million) and net assets at 31st December 2008 of approximately INR79 million (GBP1.1 million).
The sale of Aggreko's European OFA rental business to Atlas Copco is for a total consideration, payable is cash on completion of Euro14.6 million (GBP12.3 million). The European OFA business is expected to have revenues in 2008 of about Euro8.7 million (GBP7.3 million) and net assets at completion of approximately Euro5.0 million (GBP4.2 million). The transaction is subject to clearances by the relevant regulatory authorities.
Commenting on the transactions, Rupert Soames, Chief Executive of Aggreko, said: "These transactions are in line with our strategy of focusing our capital investment in growing markets where attractive returns can be achieved. Our investment in India means we will have achieved one of our strategic objectives, which is to have operations on each of the four largest developing economies in the world (the others being Brazil, Russia and China).
Oil-free air is the smallest of our product groups, and while we have a large and successful oil-free air rental business in North America in which we will continue to invest, we do not believe that our European OFA business has the scale to warrant further investment".
Aggreko was advised on the OFA transaction by Tricorn Partners LLP.