The company did not reveal the cost of the proposed acquisition, but said that all the details, including the consideration for the acquisition, would be announced after closing the deal by July 15.
A press note by the company said the proposed acquisition would fortify an important pillar in the companys integrated mechanical, electrical, plumbing and fire fighting (MEP) contracting offerings. The promoters of DS Gupta Construction will continue to manage the business for the foreseeable future, even after the acquisition, it added.
The company said customers prefer an integrated MEP contractor rather than several independent vendors. It acquired Naseer Electricals in early 2008 to add electrical contracting capabilities, following which it began offering integrated MEP services across the country.
The company said it also thought it prudent to acquire these capabilities inorganically through a strategic acquisition to leverage the growth opportunities available.
Mumbai-based DS Gupta Construction, with a turnover of Rs 130 crore in FY10, has executed contracts for hotels, hospitals, IT/ITES parks and residential complexes.
With this acquisition, not only will Blue Star be in a position to aggressively pursue integrated MEP business, but will also bid for standalone plumbing and fire-fighting projects by cross-selling its services to existing air conditioning and electrical contracting customers, the company statement said.
In several stand-alone air conditioning jobs that Blue Star executed in the past, DS Gupta Construction was the plumbing and fire fighting contractor, it said.