Kirloskar Oil Engines (KOEL) has executed a definitive agreement, on June 21, 2017, to acquire 76 per cent stake in La-Gajjar Machineries (LGM) at a valuation of 7.89 times EBITDA for the year-ending March 2018. The balance holding will be acquired by KOEL over a five-year period. LGM provides KOEL a strong and established footprint into the electric pump market through its ‘Varuna’ and ‘Raindrop’ brand of submersible and mono-block pumps and further consolidates on KOEL’s strong position in the diesel and electric pump segment. Commenting on the acquisition, Nihal Kulkarni, Managing Director, KOEL, says, “This acquisition underlines our commitment and focus on fundamentals of energy, water and food. In recent years we have increased our focus on rural India by building a vast digitised network of over 500 distributors and over 25000 retailers; and through this acquisition we believe that we will be able to further utilise this huge network to deliver value for all stakeholders.” T Vinod Kumar, Chief Financial and Human Resources Officer, KOEL, says, “This a strategic fit for KOEL, and we believe that both organisations complement each other extremely well in more ways than one. The pump set market has been witnessing steady growth, and this alliance offers an excellent opportunity for the synergies and combined strengths of the two entities to play out in the market.” Udayan Gajjar, Chairman and principal shareholder, LGM Group, says, “The partnership with KOEL will help the company to further build on its brand strengths, market presence and product knowledge created over the years and will be beneficial for all the stakeholders in the business viz customers, employees and the suppliers.” The current shareholders and the management team of LGM would continue to be actively involved in the business. Antony Cherukara, Vice President-Corporate Strategy and Head Agriculture & Allied Business, commenting on the strategy, says, “Kirloskar Oil Engines is the leader in diesel engines pump set business and has forayed into farm mechanisation through the most awarded product for small farmers named ‘Mega T’. The product has already gained wide acceptance as an alternate to the more expensive tractors across India. With this pump foray, KOEL intends to use its wide distribution network to increase sale and achieve leadership in the complete pump segment. La-Gajjar, which sells ‘Varuna’ brand of pumps, will add to the portfolio of products in the KOEL Agriculture and Allied Business.” EY and PDS Legal were the M&A and legal advisors, respectively, for LGM. DSK Legal were the legal advisors for KOEL.