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Pitti Engineering has signed an agreement with Dakshin Foundry (DFPL) and its shareholders to acquire entire equity share capital for ₹153 crore.
The cost of acquisition comprises of the business value and working capital of DFPL on the acquisition date. The debt-free DFPL has a positive cash and bank balance of ₹43 crore as of June-end.
The company proposes to complete the acquisition in 15 days of signing the definitive agreement.
DFPL is engaged in the manufacture of high-quality casting in ductile iron, grey iron, low carbon, alloy steel grades and simo iron castings. It has two manufacturing facilities of 4,200 tonnes per annum at Hosakote, Bengaluru.
Inorganic growth
Akshay S Pitti, Managing Director, Pitti Engineering, said the acquisition of DFPL will provide lot of synergy to the existing business. “DFPL would add to our production capacity and operational strength. The acquisition also aligns with our inorganic growth strategy,” he added.
DFPL revenue increased 22 per cent last fiscal to ₹71 crore against ₹58 crore in FY22, while EBITDA was up at ₹21 crore (₹10 crore) in the same period.
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