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 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.
NOTE: An exchange rate of £=€1.185 and £=INR74.35 has
been used.