KEC buys US tower firm for R450 cr
Power transmission and engineering firm KEC International on Tuesday announced the acquisition of US-based SAE towers for $95 million (R450 crore).business Updated: Sep 07, 2010 23:54 IST
Power transmission and engineering firm KEC International on Tuesday announced the acquisition of US-based SAE towers for $95 million (R450 crore). The company, a part of the R17,000-cr RPG Group, is also eyeing more acquisitions in the US as it feels valuations are attractive. The acquisition will be funded through a mix of internal accruals and debt.
"We will be looking for more acquisitions for other group companies in the US as the valuations are reasonably good there right now," said Harsh Goenka, chairman, RPG Group. "We are looking at options within the group to grow our business further and it makes more sense for Indian companies to look for acquisition possibilities in the US and Europe."
The acquisition is expected to strengthen the company's position in the growing markets of US, Mexico and Brazil and offer access to other South American countries and Canada.
With a capacity of 100,000 MT, SAE will add almost 50 per cent to the existing capacity of KEC and take the total capacity to 311,000 MT. "While production cost is cheaper in India, the revenue per tonne is higher for SAE and it has a EBITDA margin of 14 per cent as against 9-10 per cent of KEC," said Ramesh Chandak, MD & CEO, KEC International.