The Hindu Business Line : Nitin Fire formally acquires 40% in Dubai co New Age

Nitin Fire Protection Industries Ltd (NFPIL) on Tuesday formally acquired 40 per cent stake in a Dubai based fire protection company New Age Company LLC. Mr Rahul Shah, Director of NFPIL, told Business Line that though the formal deal was signed today, NFPIL took management control a couple months ago.

The unlisted company is now 51 per cent held by a local promoter and 9 per cent by an NRI, who before the deal held 49 per cent.

New Age’s fire protection contract business in the infrastructure and housing sector covers all seven emirates and has a market share of 20 per cent. Mr Shah said the price for the stake is little over Rs 16 crore. It bought the stake through UAE domiciled SPV and 100 per cent subsidiary -- Nitin Venture FZE.

According to sources close to the deal, NFPIL would pay 15 million dirham (Rs16.29 crore) for the stake and valued the Dubai company at 37.5 million dirham (Rs40.73 crore).

NFPIL has paid 7 million dirham and balance 8 million dirham is payable by January 2009. NFPIL would fund this acquisition out of internal accruals and debt .

The company, which is engaged in fire protection, fire detection systems, emergency lighting system, water-mist fire protection system, does procure large part of manufactured products, which Nitin many now provide.

It has also got major overseas licence along with local licence with staff over 100 personnel employed by the company.

Financial performance

For year ending financial year 2007-08, the company made net sales of Rs 44 crore and net profit 17 per cent. This acquisition is valued at 6.5 times on financial year 2007-08 profit.

Thirty-year-old New Age has executed several projects with local civic bodies, airport development authorities, port authority and at telecommunication sites, cement plant, Emirate Ministry of Education and Civil Defence. It has also got major local civil defence license and registrations.

The acquisition would provide a synergy for NFPIL in the UAE market, which is growing 25 per cent year-on-year.

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