Elgi Compressors USA, a subsidiary of Elgi Equipments, has acquired Michigan Air Solutions in a move to expand its presence in the U.S. According to Jairam Varadaraj, MD of Elgi Equipments, this is an important step for the company to strengthen its position as a leading player in the global compressed air industry. The cost of acquisition is estimated to be approximately $6 million.
Michigan Air Solutions in Michigan is an independent air compressor distributor and was selling Elgi’s products for the last one year.
Michigan Air Solutions has an annual business of nearly $ 10 million.
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“Gaining entry through distributors who are already selling other brands too is difficult. But we have a time frame for our acceleration in a market. So we inject acquisition opportunities. The share of business Elgi was getting from Michigan Air was small. We will be able to expand that now. The other brands it was selling will be discontinued and we will add our products,” he said.
Last financial year, the consolidated revenue of Elgi was about ₹2,000 crore. Nearly 50% of it was from overseas business. “So far, if we look at our results, we are slightly above last year.” Though there are uncertainties in the Indian market, the total revenue should be the same or slightly higher than last year. This year, so far, overseas business has grown 5% to 6%. The company is in the launch phase of its CK2 (Conquer K2) programme to become world number two globally. For the next two years, some of the markets it will focus will be India, Europe, US, Australia, and Indonesia. “We are constantly scanning for opportunities (for acquisition),” he added. It acquired a Sydney-headquartered industrial air compressor distributor company in 2018.