Lloyd Electric & Engineering Ltd.

Lloyd Electric and Engineering Limited (LEEL) acquires Luvata Czech s.r.o.

• Lloyd Electric is the first Indian coil manufacturer to have its own coil manufacturing facilities in Europe.

• Luvata Czech is a significant player in manufacturing customized finned pack heat exchangers (coils) serving the heating ventilation, air conditioning and refrigeration for its customers throughout Europe.

Lloyd Electric and Engineering Limited (LEEL), one of the largest manufacturers of Air Conditioner coils in India, today announced the acquisition of Luvata Czech s.r.o. in Prague, Czech Republic through its Special Purpose Vehicle (SPV) Lloyd Coils Czech s.r.o.

Commenting on the acquisition, Mr. Brij Raj Punj, Chairman and Managing Director, LEEL, said,
“We are very excited about this acquisition. Luvata Czech, represents a unique opportunity in the European market, offering LEEL entry into the attractive, regulated, high growth finned pack heat exchanger (coils) market in Europe. Luvata Czech has an excellent track record, with its management and employees possessing wealth of experience and expertise in their line of business. With this acquisition, LEEL, is likely to attain an attractive position in the fragmented European coil market and thereby, effectively leverage Luvata Czech’s strong customer base to further grow the business. The acquisition is likely to lead to significant business synergies, especially in controlling costs, technology absorption and direct access to European markets.”

Commenting at the time of the Commission’s ruling, John-Peter Leesi, CEO and President of Luvata commented:"A healthy market cannot exist without fair competition and so we respect the Commission’s judgment. We wish the best of futures to our former Czech company under its new owners and I hope it will continue with some of the Luvata tradition that made it so successful.”

LEEL has acquired Luvata Czech s.r.o. to provide a strong foothold into the European markets.

The European market is fragmented and most OEM’s (Original Equipment Manufacturers) are now looking to outsource the same to specialized coil manufacturers. This would help LEEL to increase its business volume by working closely with clients and developing products as per their requirement. LEEL with this acquisition would be able to establish a global presence and an overseas manufacturing base. The initiative would allow LEEL access to the strong portfolio (customer base) of Luvata Czech. It would result in significant business synergies and the addition of Luvata Czech’s experienced management team who have strong relations in the industry.

Luvata Czech is the leading manufacturer of customized finned pack heat exchangers (coils) serving the heating, ventilation, air conditioning and refrigeration (HVAC&R) for customers throughout Europe. Luvata Czech employs approximately 300 staff in its 6200 m2 Radotin, Prague facility. The localization is favorable from a market perspective with vicinity to several of the major Central European Markets. The customer base comprises an attractive mix of several large HVAC&R OEMs as well as smaller customers. LEEL proposes to retain and take advantage of Luvata Czech’s experienced management team due to their strong and long term relationships with their suppliers and customers which is very critical for succeeding in this industry. LEEL will also consider further investments to tap the growth potential of Luvata Czech. In CY2007 Luvata Czech reported total revenues of about € 30.5 mn with an EBIDTA of about € 1.88 mn.

The acquisition has been funded through a combination of debt and equity. Lloyd coils Czech s.r.o. (SPV of LEEL) has raised necessary debt on its balance sheet. LEEL has not shared the consideration for this transaction due to regulatory/purchase agreement related limitations on disclosure around this initiative. The transaction is not subject to any further regulatory and statutory approvals that may be required in this regard. European Commission has approved Lloyd as a suitable buyer.

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