PCM Cement Concrete Pvt Ltd, a concrete Railway sleeper manufacturer, said on Monday that it has acquired German company Rail.One GmbH for €36 million.
The Rs 350-crore PCM has a total of five units – one unit in West Bengal and Assam each, two in Saudi Arabia and one in Abu Dhabi.
Kamal Kumar Mittal, Chairman, PCM Group, told Business Line that PCM Germany GmbH, a special purpose vehicle of the Group, acquired Rail.One GmbH and all its subsidiaries for €36 million.
The deal was done after the owners made the company debt-free. KPMG did the due-diligence study for PCM.
“Some 11 European bankers had lent €86 million to Rail.One in 2006. Though the company was making operating profit from operations of all its existing seven plants, interest burden was eating into its profits,” said Mittal.
Rail.One manufactures main-track and turnout ties made of concrete. With over 600 employees at its plants in Germany, Romania, Saudi Arabia, Spain, South Korea, Turkey, and Hungary, Rail.One has total annual capacity for four million main-track ties, as well as for over 5.80 lakh linear metres of switch ties.
Last month, the German company announced plans to construct a production plant in US.
The 6-lakh-tonne-unit in Iowa was proposed to be set up through its US subsidiary Rail.One USA Corp at an investment of €15 million.
The total turnover of Rail.One and its subsidiaries stands at €130 million.
Mittal said PCM would carry through the US proposal for Rail.One.
PCM before the takeover had a total capacity of 3.1 lakh tonnes. Commissioning of the plant was targeted for the end of this calendar year.
The current annual replacement of around 22 million wooden ties on American railroads is expected to result in greater replacement with concrete ties.