Through this strategic acquisition, Blue Star is looking to leverage the growth opportunities available in the MEP segment
Blue Star Limited intends to strengthen its Electro Mechanical Projects business through the strategic acquisition of the businesses of D S Gupta Construction Pvt Ltd, as a going concern. Blue Star is a central airconditioning and commercial refrigeration major, while DS Gupta is the largest independent plumbing and fire fighting contracting company in India.
This move will fortify an important pillar in Blue Star's integrated Mechanical, Electrical, Plumbing & Fire fighting (MEP) contracting offering for its commercial and residential real estate customers. The promoters of DS Gupta Construction will continue to manage the business for the foreseeable future.
Closing Date: The transaction is subject to customary closing conditions being met. More details on the acquisition including the consideration will be provided after the Closing Date, which is expected to be on or before July 15, 2010.
About D S Gupta Construction: DS Gupta Construction Pvt Ltd is headquartered in Mumbai with a turnover of Rs130 crore in FY10. Established over two decades ago, it has pan India operations and is reputed for its quality of work and timely execution. It has a large pool of skilled manpower coupled with longstanding relationships and impressive credentials in segments such as hotels, hospitals, educational institutions, commercial buildings, IT/ITES parks and residential complexes. It has also executed projects for several green buildings.
Some of the notable projects executed by D S Gupta Construction include Rajiv Gandhi International Airport, Hyderabad; Kokilaben Dhirubhai Ambani Hospital, Mumbai; Wipro, Gurgaon; The Leela, Mumbai, Gurgaon & Udaipur; NSE, Mumbai; ISB, Hyderabad and UB City, Bengaluru amongst others. Blue Star's MEP offering: Blue Star is India’s largest central airconditioning company with over six decades of experience. A few years ago, it recognized the trend of customers preferring an integrated MEP contractor rather than several independent vendors.
In order to add electrical contracting capabilities, Blue Star acquired Naseer Electricals in early 2008 and began offering integrated MEP services after a successful integration and roll out of operations across the country. Thereafter, Blue Star has executed several integrated MEP orders.
The plumbing and fire fighting contracting skills were being developed in-house, and the company has been executing quite a few plumbing and fire fighting contracting projects such as Delhi Airport Metro Express Line; Hotel Shangri-La, Mumbai; ESIC Hospital, Mumbai, Hotel Park Hyatt, Chennai and Sea Valley Resort, Vizag, to name a few.
However, the Company thought it prudent to acquire these capabilities inorganically through a strategic acquisition, in order to leverage the growth opportunities available. With this acquisition, not only will the Company be in a position to aggressively pursue integrated MEP business, but will also bid for stand alone plumbing and fire fighting contracting projects by cross-selling its services to its existing airconditioning and electrical contracting customers.
In fact, in several of the stand-alone airconditioning jobs that Blue Star has executed in the past, DS Gupta Construction has been the plumbing and fire fighting contractor.
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