KBL Makes A Global Gambit With 6-m British Buyout

Pune, November 8 | Updated: Nov 9 2003, 05:30am hrs
In its first overseas acquisition, Kirloskar Brothers Ltd (KBL) has acquired SPP Pumps Ltd of Britain. SPP Pumps was part of the Thyssen Bornemiscza Group and the group was divesting it to focus on its core areas. KBL acquired 97.5 per cent in the British company that clocked a sales revenue of 27 million during 2002. The deal signed on Friday has been valued between 6-7 million.

For KBL, this acquisition means an expansion of its international business. At the moment, exports contribute to around 18 per cent of KBL turnover. Last fiscal its turnover was Rs 480 crore, of which exports were about Rs 85 crore. KBL exports to 65 countries, including nine pump companies in Europe. The deal is being financed by Exim Bank and Bank of India. ICICI Securities were the advisors to deal.

Kirloskar Brothers has had a 30-year relationship with SPP in supplying components. It began in 1973, when SPP signed an agreement with KBL for supplying casting and components. KBL and SPP worked on the joint development of a new range of split casing pumps for global markets during 1980.

The pumps were jointly designed and exported to several countries, including the US, South East Asia and Europe.

CMD Sanjay Kirloskar said there was an understanding between the two managements that SPP would run as an independent company and all transactions between the two would be at an arms-length basis. KBL will continue to maintain and protect the existing close relationships with customers in Europe. Former SPP MD Owen Shevlin is being re-appointed as MD of the company.

SPP enjoys a dominant market share in British fire-fighting market. The company is currently supplying engineered fire-fighting pump packages to the Iraqi and Iranian oil fields and is a significant player in the West Asian markets. It is also a recognised supplier in the European and the Commonwealth countries for these equipment. SPP pumping packages also have a presence in the construction, irrigation, water supply and sewage segments.