Pitti Engineering has signed an agreement to acquire Bagadia Chaitra Industries for an enterprise value of ₹125 crore.

Also read: Pitti Engineering Q1 net up 19% on lower cost

As part of the overall consideration, PEL will infuse up to ₹40 crore as funding into BCIPL, on Closing Date, to repay the existing debt in BCIPL.

Closing of the proposed acquisition is subject to fulfilment of condition precedents as agreed between the parties, said the company.

BCIPL is a manufacturer of electrical laminations and aluminum die cast rotors for AC/DC motors, Alternators, Pumps, Home Appliances, Electrical Vehicle etc. and industries with major geographical exposure to the south Indian market.

BCIPL operates out of Tumkur district, Karnataka where it has an installed capacity of 18,000 tonne per annum.

The acquisition will help PEL broaden its presence in South India and add to the overall asset base. It also provides entry into new end use sectors and add new customers. Overtime, with new customer acquisition and synergies coming in sales and marketing, PEL would be able to sell their existing product portfolio as well to these new customers, thereby enabling greater market penetration. Additionally, the acquisition aligns with PEL’s inorganic growth strategy and will provide enhanced operational strength.

Akshay S Pitti, Vice-Chairman and Managing Director, Pitti Engineering said the company believes in continuously adding production capacity at strategic locations and enhancing value proposition to customers.

The acquisition of BCIPL is an important step in this direction as it is strategically relevant, provides enhanced operational strength and enhance customer base, he said.