Feb 29, 2012 (LBO) - Sri Lanka's Access Engineering bought 60 percent of vehicle importer Sathosa Motors from Japan's Itochu Corp. for 846 million rupees paying 235 rupees a share, its chairman Sumal Perera said.
He said the acquisition would be a good fit to the group's existing business which is expanding.
"In addition to organic growth, we were looking at any good strategic investment opportunity," he told LBO.
"We believe there will be steady growth in the commercial vehicle and construction machinery business in the coming years."
Access Engineering plans an initial public offer opening on March 6 of 20 million shares at 25 rupees each to raise 500 million rupees.
Perera said in June 2011, the firm raised 4.5 billion rupees in a private placement of shares at the same price.
The acquisition of Sathosa Motors would also provide Access Engineering access to the Sathosa Motor's vehicle workshop, Perera said.
"There will also b synergies with the workshop. We have increased our company's plant and machinery and we need a very good workshop to maintain them. Also, there is the Isuzu brand name."
Perera said Itochu Corp wanted to exit from Sathosa Motors and selected Access after evaluating a few candidates.
"Itochu is a very large Japanese trading company. They felt they needed a good local partner to go forward and focus on the business and after evaluating a few candidates they selected us," Perera said.
"But they will continue to be our trading partner in Japan in shipping, Isuzu vehicles and spares."
source - www.lbo.lk
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