BS Ltd, a Hyderabad-based integrated power sector transmission and distribution services provider, has announced plans to acquire businesses from Agarwal Steels Structures India, Durafast Automotive, NHS Metals and Rajesh Sandhi Infras & Metals for a total investment of ₹937 crore.
These acquisitions cover different operational businesses, including tower manufacturing, manufacturing of components such as anti-theft fasteners, steel structures, transmission line hardware and related EPC contracts.
The acquisitions are to be undertaken through slump sale from the respective sellers.
The proposed transactions are expected to significantly improve bidding capability, financial synergy and facilitate scaling up the value chain, apart from expansion into railway electrification under EPC, according to the company.
“The Board has been evaluating different inorganic options for potential of backward and forward integration which will suit the strategic objective of the company,” said Rajesh Agarwal, Chairman and Managing Director of BS Limited said.
“The proposed acquisitions are expected to benefit the company through improvement in bidding strength, enhanced cost control, expansion into railway electrification under EPC, operational and financial synergies and strengthen the company’s foothold in the industry. With this acquisition, the company aims to achieve revenues of ₹10,000 crore in the next two-three years,” he said.
Agarwal told BusinessLine that these businesses would be complementary to the company’s core business of transmission lines.
The transactions are likely to be concluded in six months. It would be made through share swap deal.
The Board of Directors have approved the synergetic acquisition business proposal aimed at expediting growth.
The company reported a 6.8 per cent rise in net profit at ₹75.19 crore on a consolidated basis for the financial year ended March 31, 2015 as against ₹70.37 crore in the previous fiscal.
Total income for the full year stood at ₹2,673.14 crore, up 15 per cent over ₹2,320.72 crore in the previous fiscal.
The company’s shares closed at ₹42.15 on Wednesday, up 2.31 per cent.