IFGL Refractories Ltd, the SK Bajoria refractories maker, is acquiring a 96% stake in Hofmann Ceramic GmbH of Germany for around €7 million.
The deal will also give IFGL control over Hofmann's subsidiaries in the UK and the Czech republic, apart from increasing its footprint abroad to six countries.
The Hoffman entities reported a combined turnover of € 13.67 million in 2007-08.
IFGL's stepdown subsidiary in the UK, Monocon International Refractories, which was acquired in 2006, will acquire the Hofmann stake.
At present, it has plants in India, China, the UK, the US and Brazil making the special vessel- lining materials that can withstand temperatures of over 1500 degrees C involved in steelmaking.
Hofmann, predominantly engaged in manufacturing ceramic filters and other refractories for the foundry industry, has its facilities at Breitscheid-Erdbach in Germany and in Bela in the Czech Republic.
Hartmut Hofmann, the current managing director, will continue to spearhead the company even after the acquisition. IFGL would also continue to market the products under the Hofmann Ceramic brand.
Pradeep Bajoria, director and chief executive, had told FE earlier that IFGL has budgeted around € 10 million for acquisitions.
He said that the acquisition was mainly intended for getting latest technologies, products and manufacturing lines. But production would be shifted to India and China because it would save 40% of the operational cost.
The facilities in the US and Europe would be mostly used for R&D and developing higher grades of products, he said.
Source: Financial Express