Pitti Engineering signs a definitive agreement to acquire Bagadia Chaitra Industries Private Limited

Pitti Engineering Limited ("PEL") has signed an agreement with Bagadia Chaitra Industries Private Limited ("BCIPL") and its shareholders to acquire 100% of the equity share capital of BCIPL at an Enterprise Valuation of ₹ 124.92 crores. The cost of acquisition would be arrived at, by adjusting the said Enterprise Value for the Net Debt and Working Capital changes on the Closing Date and subject to other adjustments that are mutually agreed between the Parties. As part of the overall consideration, PEL will infuse upto ₹ 40 crores as funding into BCIPL, on Closing Date, to repay the existing debt in BCIPL.

Closing of the proposed acquisition is subject to fulfilment of condition precedents as agreed between the Parties.

BCIPL is a manufacturer of electrical laminations and aluminum die cast rotors for AC/DC motors, Alternators, Pumps, Home Appliances, Electrical Vehicle etc. industries with major geographical exposure to south Indian market. BCIPL operates out of Tumkur district, Karnataka where it has its manufacturing facilities. BCIPL has an installed capacity of 18,000 Tonnes Per Annum.

This acquisition would help PEL broaden its presence in South India, will add to the overall asset base and production capacity, provide entry into new end use sectors and add new customers. Overtime, with new customer acquisition and synergies coming in sales and marketing, PEL would be able to sell their existing product portfolio as well to these new customers, thereby enabling greater market penetration. Additionally, the acquisition aligns with PEL's inorganic growth strategy and will provide enhanced operational strength.

Mr. Akshay S Pitti, Vice-Chairman and Managing Director of Pitti Engineering Limited said, "We are very excited to welcome BCIPL's leadership team, and their employees to the Pitti group. We have always believed in continuously adding production capacity at strategic locations and enhancing our value proposition to our valued customers. The acquisition of BCIPL is an important step in this direction as it is strategically relevant, provides enhanced operational strength and adds customer base."

Shares of Pitti Engineering Limited was last trading in BSE at Rs. 745.55 as compared to the previous close of Rs. 749.60. The total number of shares traded during the day was 14668 in over 1397 trades.

The stock hit an intraday high of Rs. 778.75 and intraday low of 722.20. The net turnover during the day was Rs. 10868110.00.

Source : Equity Bulls

Keywords

PittiEngineering INE450D01021 Acquisition BagadiaChaitraIndustries