Kirloskar buys out Aban Constructions for Rs 57 cr

PUNE: Kirloskar Brothers (KBL), the over Rs 900-crore pump manufacturer, has acquired Chennai-based Aban Constructions for Rs 57 crore. The acquisition gives KBL a presence in the oil and gas pipeline business, Sanjay C Kirloskar, chairman and managing director, KBL, said, and it now positions KBL as an engineering, procurement and construction (EPC) company.

“We were looking to strengthen our civil engineering side as our projects grew 50% last year. As Aban Construction has a presence in the oil and gas pipeline sector, it will allow us to grow that business as well,” Mr Kirloskar stated. Following the acquisition, Aban Construction will become a subsidiary of KBL and a change in name could happen, over a period of time.

The acquisition will allow KBL to become an end-to-end, large pump company since it has evolved into a turnkey solutions provider from a pump manufacturer.Recently, it sold off 51% stake in its joint venture, compressor manufacturer,
Kirloskar Copeland, to focus on its pumps business. Its other joint venture, Kirloskar Ebara Pumps, may give it an entry into the 5 mw steam turbine market, company officials had stated at KBL’s annual general meeting earlier this year. It is in the midst of a Rs 80-crore capacity expansion, they had then said.

A statement from the company issued on Friday noted that the Rs 90-crore Aban Construction, part of the Aban group, was set up in 1969 as a civil and construction engineering business. Among its businesses is the laying of cross country pipelines for oil and gas and civil construction projects like tunnels, bridges, roads and industrial plants.

Mr Kirloskar said they will maintain an arm’s length as they have with all their previous acquisitions, adding that over time, they expect KBL to form 20% of Aban’s business. He added that they will take the Aban business overseas, where it does not have a presence. KBL made its first overseas acquisition in ’03, when it acquired SPP Pumps, in Reading, UK. ICICI Securities were the sole advisers to KBL on this transaction.