Aggreko adds Indian assets with £3.9m acquisition

Aggreko, the Scottish temporary-power specialist, has unveiled plans to expand its global operations by buying a business in India for £3.9million.

Glasgow-based Aggreko said yesterday the acquisition of the power-rental assets and business from Cummins India – a subsidiary of international power-generation specialist Cummins – would add a business bringing in revenue of about £2.4million a year, with projected net assets of £1.1million at the end of 2008.

Aggreko also said it was selling its oil-free compressed-air business in Europe to Swedish industrial equipment manufacturing and rental giant Atlas Copco in a transaction worth £12.3million.

The Cummins deal is subject to acceptance by the Indian subsidiary’s shareholders, while the disposal is dependent on clearance by regulators.

Rupert Soames, Aggreko’s chief executive, said: “These transactions are in line with our strategy of focusing our capital investment in growing markets where attractive returns can be achieved.

“Our investment in India means we will have achieved one of our strategic objectives, which is to have operations in each of the four largest developing economies in the world; the others being Brazil, Russia and China.”

Commenting on the disposal, Mr Soames said: “Oil-free air (OFA) 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 business has the scale to warrant further investment.”

Atlas Copco, whose subsidiaries include Kolfor Plant, of Dundee, said Aggreko’s European OFA business was a perfect fit with its specialty rental division because they served similar market segments and applications.

Aggreko, which helped to power two of this summer’s biggest sporting events – the Euro 2008 football championships and Olympic Games – employs more than 2,200 people at about 100 sites in 29 countries.