Everest Kanto Cylinders (EKC) recently revealed it is to acquire a US company for around $70m, though curiously, a number of the details about the targeted company have not yet been disclosed and it is thought that the company is yet to confirm this.
It is thought that like EKC, the US company also manufactures compressed natural gas (CNG) and industrial gas cylinders and EKC could use the funds it raised recently to meet the acquisition cost.
In two quick rounds of fund raising in October 2007, the company raised $35m through a foreign currency convertible bond (FCCB) issue and followed it up with a rupee funding worth $20-25m. After its December 2005 initial public offering of Rs90 crore, EKC first raised Rs92 crore in November 2006 from a clutch of financial institutions.
On its way to become a leading CNG cylinder manufacturer with global scale, Everest Kanto is believed to be in an ambitious expansion mode and is reported to be building capacities at plants in India, China and Dubai, while also currently seeing a $60m capex plan.
Details such as name, valuation, revenues, and production capacity of the target company were not given and company officials were unavailable for comment.