Thursday, Aggreko Plc (AGK.L), a provider of temporary power solutions, announced signing of two agreements; one involving the acquisition of business and assets related to power rental of Cummins India Ltd. (CUMMINS.BO) for GBP 3.9 million, and second, the sale of European oil-free compressed air, or OFA, rental business to Atlas Copco (ATLKF.PK).
Aggreko noted that the total consideration term for Cummins' power rental business is payable in cash on completion of GBP 3.9 million, or INR 291 million, and is subject to the approval of CIL's shareholders.
The company said that sale of its European OFA rental business to Atlas Copco is for a total consideration, payable in cash on completion, of EUR 14.6 million, or GBP 12.3 million.
Commenting on the transactions, Rupert Soames, chief executive of Aggreko, said, "These transactions are in line with our strategy of focusing our capital investment in growing markets where attractive returns can be achieved."
Aggreko expects the business being acquired to have revenues in 2008 of about GBP 2.4 million, or INR 179 million, and net assets at 31 December 2008 of about GBP 1.1 million, or INR 79 million.
Additionally, Aggreko said that it expects the OFA business to report revenues in 2008 of about EUR 8.7 million, or GBP 7.3 million, and net assets at completion of approximately EUR 5.0 million, or GBP 4.2 million.
Furthermore, Aggreko said, "Oil-free air is the smallest of our product groups, and while we have a large and successful OFA rental business in North America in which we will continue to invest, we do not believe that our European OFA business has the scale to warrant further investment."
For the OFA transaction, Aggreko was advised by Tricorn Partners LLP.
AGK.L is currently trading on London stock exchange at 389.75 pence, up 1.83%.
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