Kirloskar Oil Engines Limited (KOEL), announced that it has executed a definitive agreement, on June 21, 2017, to acquire 76% stake in La-Gajjar Machineries (LGM) at a valuation of 7.89 times EBITDA for the year ending March 2018. The balance holding will be acquired by KOEL over a 5 year period.

LGM provides KOEL a strong and established footprint into the electric pump market through its ‘Varuna' and ‘Raindrop' brand of submersible and mono-block pumps and further consolidates on KOEL's strong position in the diesel and electric pump segment. 

Commenting on the acquisition, Managing Director of KOEL Nihal Kulkarni said, "This acquisition underlines our commitment and focus on fundamentals of energy, water and food.  In recent years we have increased our focus on rural India by building a vast digitized network of over 500 distributors and over 25000 retailers and through this acquisition we believe that we will be able to further utilise this huge network to deliver value for all stake holders."

T Vinod Kumar, Chief Financial and Human Resources Officer of KOEL said, "This a strategic fit for KOEL and we believe that both organizations complement each other extremely well in more ways than one. The pump set market has been witnessing steady growth and this alliance offers an excellent opportunity for the synergies and combined strengths of the two entities to play out in the market."

Udayan Gajjar, Chairman and principal shareholder of LGM group, said, "The partnership with KOEL will help the Company to further build on its brand strengths, market presence and product knowledge created over the years and will be beneficial for all the stakeholders in the business viz. customers, employees and the suppliers."

(Continued on the next page)