Crompton Greaves buys UK firm for Rs 200 cr

Crompton Greaves, part of the Avantha group, continued with its inorganic growth strategy by acquiring UK-based electrical engineering firm Power Technology Solutions (PTS) for 30 million pounds, or about Rs 204 crore, on Tuesday.

This is the company’s sixth buy since 2005.

Crompton’s managing director Sudhir M Trehan was not available for comment since he was travelling. But a company release quoting him said, “CG will gain significant consolidation in the engineering, procurement & maintenance (EPM) segment in UK and get access to newer markets. This acquisition is a step forward towards achieving our revenue goal of $8 billion by 2015.”

An acquisition was on the cards so the market was not surprised. The stock closed at Rs 258.40, up 2.32%, on the Bombay Stock Exchange on Tuesday. Trehan had also in last October said the company was looking at a $300-600 million buy in Latin America.
Puneet Bambha, research analyst, Angel Broking, said it was a positive move for the company. “The company has a technology gap in a few areas which it has been bridging through acquisitions,” he said.

Crompton also has a good track record in turning around companies it has acquired, Bambha said.

Crompton’s earlier acquisitions include Belgian-based Pauwels, Hungary’s Ganz, Irish-based Microsol Holdings and Sonomatra of France. Another analyst said the acquisition was another step in Crompton’s plan to gain access to new markets.

“Crompton has been the top pick in its segment and will continue to focus on inorganic as well as organic expansion,” he said, requesting anonymity.