Purchase of Cummins Power
Rental business in India and disposal of European Oil-Free
Compressed Air business
Aggreko plc, the world
leader in the supply of temporary power, 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
(£3.9 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 (£2.4 million) and net
assets at 31st December 2008 of approximately INR79
million (£1.1 million).
The sale of Aggreko’s
European OFA rental business to Atlas Copco is for a total
consideration, payable in cash on completion, of €14.6 million
(£12.3 million). The European OFA business is expected to
have revenues in 2008 of about €8.7 million (£7.3 million) and net
assets at completion of approximately €5.0 million (£4.2 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 achieved operations
in 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 OFA 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.