AC coil manufacturer Lloyd Electric makes Czech acquisition for undisclosed sum

14 May 2008

One of India's largest air conditioner coil manufacturers, Lloyd Electric and Engineering Ltd, today announced the acquisition of Luvata Czech in Prague through its special purpose vehicle, Lloyd Coils Czech. However, the management refused to disclose the acquisition price citing a confidentiality agreement.

Lloyd Electric is a part of $220-million Lloyd Group and manufactures condenser coils and evaporator coils. Its products are used in window, package, automotive and split air-conditioners. The company also supplies products to many original equipment manufacturers (OEMs). The company's net profit rose 1.5 per cent to Rs.15.43 crore on 21 per cent rise in sales to Rs.185.47 crore in Q4 March 2008 over Q4 March 2007.

Luvata is a significant player in manufacturing customized finned pack heat exchangers serving the heating ventilation, air conditioning and refrigeration for its customers throughout Europe Last year, it reported revenues of about €30.5 million with earnings before interest, tax, depreciation and amortization (EBITDA) of €1.88 million.

''Luvata Czech represents a unique opportunity in the European market, offering LEEL entry into coils market in Europe,'' LEEL chairman and managing director Brij Raj Punj said in a statement.

He said that the company had been looking for overseas acquisitions for quite some time and had raised $25 million in global depositary receipts (GDR) a couple of years back for this purpose.

He considered this deal to be ''a good bargain in a company which is profit making and is the second largest in Europe'' and expressed hope that it would give LEEL ''a stepping-stone to the European market''. He added that beyond the European plans, some synergies ''are likely to be generated'' between the two companies in India, with Luvata's numbers showing up on Lloyd Electric's books in the third or fourth quarter.