Aggreko makes big South American acquisition

Aggreko is to buy Poit Energia, a major power renter in Brazil, Chile, Argentina and Peru for R$404 million (£140 million), with an additional payment of up to R$60 million (£21 million) if targets are met this year.

The deal will double Aggreko's depot network in the region to 36 locations and boost its revenues there by around 30%, expanding Aggreko's ‘local' rentals business in South America.

Poit Energia was founded in 1999 and has a fleet of more than 1300 generators totalling 350 MW as well as lighting towers, loadbanks and accessories. Employing over 450 people, Poit is headquartered in Sao Paulo, Brazil and has 14 depots in Brazil, two in Chile and one each in Argentina and Peru.

Poit reported revenues of R$132 million (£46 million) for 2011and EBITDA profits of R$44m (£15.3 million). Aggreko said that it has delivered 45% compound annual growth rate in revenues over the past three years and had trading margins of more than 20%.

Aggreko is already strong in the international power project sector in Latin America and the Poit acquisition will bolster its ‘local' power rental operations in the region. The deal can also be seen as a response to growth among Aggreko's competitors in South America, with Miami-based Energy International and Florida's APR Energy both expanding there.

Aggreko said it would "materially strengthen [our] business in South America, both in terms of geographic footprint and access to sectors which Aggreko is currently not in or to which it has limited exposure." The aggregate revenues of Poit Energia and Aggreko in 2011 in South America were R$555 million (£193 million).

Rupert Soames, Aggreko's chief executive, said; "We are delighted to have this opportunity to further strengthen our business in South America, which has been one of the fastest-growing parts of our business over the last three years, and we greatly look forward to welcoming the employees of Poit Energia into the Aggreko team.

"This is the fifth acquisition we have done in the Local business in the last four years and we are confident that Poit Energia, like the others, will add value to Aggreko".

Wilson Poit, the founder and executive chairman of Poit Energia said; "We have long admired Aggreko, and have the same focus on specialist, high quality, energy rental; as a consequence, our businesses are very similar, and have a very similar ethos. Poit Energia has now come to the point at which its further development is best done within a larger group, which will allow our customers and staff to benefit from the resources and opportunities Aggreko can bring them".

Aggreko said Mr Poit and his management team would continue to manage Poit Energia during the current year, following which the operations will be merged with Aggreko's business in South America.