INDIA BUSINESS WORLD - JUNE 1st - JUNE 30th - 2008
GOLDMAN BUYS MINORITY STAKE IN STERLING & WILSON FOR 200 CR
PRIVATE equity firm Goldman Sachs has acquired a minority stake in Shapoorji Pallonji’s engineering arm Sterling & Wilson for over Rs 200 crore. Confirming the development, Khurshed Daruvala, managing director, of S&W said the financial support from Goldman would enable S&W to accelerate “its growth plans both domestically and internationally. The company is planning to expand its operations in the Middle East market.”
Currently, S&W has operations in other foreign countries such as Ghana, Mauritius and Vietnam. Avendus Capital was the financial advisor for the transaction. S&W is one of the leading mechanical,electrical and plumbing contracting companies in the country, with revenue grossing Rs 1,000 crore. S&W is offering full MEP package as a one-stop solution provider. In the last 5 years, S&W registered a growth of 80%.
Shapoorji Pallonji has 51% equity stake in the company. “The MEP market in India is at an inflexion point,” said analysts. “Although the sector is highly fragmented, the overall market is expected to grow at more than 20% every year, for the next few years and is fast moving towards consolidation,” they added.
Increasing number of real estate projects has enhanced the sizes of MEP contracts in India also. Currently, only a handful of players in India have the ability to service large contracts, said industry executives.
Infrastructure is one of the key areas of operation for many major Indian engineering companies. About 30% of the revenue of engineering firms is from infrastructure activities such as engineering, design and construction of industrial projects and social and physical projects such as housing, hospitals, IT parks, expressways, bridges, ports, and water and effluent treatment projects.
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