Thermax acquires Danish boiler making co, arm for Rs 1.8 billion - Deal to help establish presence in Europe, leverage green tech

• The Pune-based energy, water and environment solutions provider Thermax Ltd has made its first overseas acquisition with the buy-out of Danish boiler manufacturing company Danstoker A.S. and its German subsidiary Omnical Kessel for ?29.5 million (Rs 180 crore). The deal, which involves takeover of two manufacturing facilities including land, in Germany and Denmark, and a staff of 237 employees, is being financed to the extent of ?20 million through Thermax's reserves. The remaining amount has been raised as a loan from the Royal Bank of Scotland.
• "The company makes products similar to what Thermax produces, and earns over 50 per cent of its current revenue from environment-friendly products. The acquisition fits into our green strategy, and will help us leverage the renewable energy movement in Europe," Mr M.S. Unnikrishnan, Managing Director, Thermax, said. With annual sales of ?40 million, core products in the range of 200-1,00,000 kg of steam an hour, and brand recognition in the Nordic countries, Germany, the UK, France and Russia, Danstoker and Omnical will help Thermax establish its presence in these regions and expand the clean-energy footprint in global markets. "We will keep both the brand names undiluted at this point. The Thermax name, we'll take forward at some point later," Mr Unnikrishnan clarified.
• Currently, the consolidated manufacturing capacity in the two newly acquired plants is between 350-450 units a year. "There is almost total capacity utilisation at Denmark, and 50 per cent in Germany which specialises in boilers using oil, gas and bio-mass, so there is more potential there," he said, adding that expansion to double the current installed capacity was possible with small investment. Thermax already has a wide, well established supplier base in India and will also consider sourcing from here if technical standards are met, he added.