New Delhi, Dec. 12 -- New Delhi-based Rama Steel Tubes Limited has agreed to buy Abu Dhabi-based Automech Group Holding Limited for AED 296 million ($80.6 million).
The deal, which is a mix of cash and stock deal, will involve Rama Steel Tubes' wholly-owned UAE-based subsidiary RST International Trading FZE acquiring 78.38% stake for AED 232 million in cash. Meanwhile, Rama Steel Tubes' will receive 21.62% stake in the for AED 64 million in Automech through share swap.
Rama Steel Tubes' and its subsidiaries will acquire a stake in all of the eight entities of Automech Group Holding Limited. The acquisition is expected to be completed in the next 5-6 months.
The acquisition will help the Mumbai-listed Rama Steel Tubes' in geographical expansion, it said in an exchange filing. It intends to improve its presence across UAE in diversified sectors in which Automech Group Holding Limited is operating, such as steel fabrications, assembly, construction and installation, precision engineering, contracting services, dewatering management and land draining, marine engine services, manufacturing, energy, engineering and infrastructure.
The company has executed projects in the Gulf Cooperation Council and European regions such as Guggenheim Museum, Hamilton & Mayfair Tower, Zayed National Museum and Mobility Pavillion in EXPO 2020.
"This strategic acquisition is intended to diversify revenue streams, achieve operational synergies, and create sustainable long-term value," Rama Steel added in the statement.
Automech reported a 7% growth in its turnover to AED 192.3 million in the financial year ended December 2024. The company has a presence in Dubai and Abu Dhabi.
Published by HT Digital Content Services with permission from VC Circle.