Adani Enterprises Ltd (AEL) on Monday said its wholly-owned subsidiary Adani Road Transport Ltd (ARTL) will acquire a 49 per cent stake in Maharashtra Border Check Post Network Ltd, with an option to acquire additional stake subject to regulatory approval.
The company in a statement said the acquisition is at an enterprise value of Rs 1,680 crore implying an attractive EBITDA multiple of 7x.
Enterprise value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market capitalization. EV includes in its calculation the market capitalization of a company but also short-term and long-term debt as well as any cash on the company's balance sheet.
The deal is subject to customary regulatory and lender's approvals and is expected to close in Q3 FY22, it added.
Maharashtra Border Check Post Network Ltd (MBCPNL) is a subsidiary of Sadbhav Infrastructure Project Limited (SIPL).
"India has made tremendous progress in building its road network and interlinking the nation, an essential contributing factor in economic development," ARTL CEO Krishna Prakash Maheshwari said.
"As the nation's largest infrastructure player, the Adani Group's drive to create a world class portfolio of road networks is aligned with our mission to become India's largest road infrastructure owner and operator, he added.
The statement noted that this acquisition also strategically dovetails with the Adani Group's formidable strength in logistics, a force-multiplying business adjacency for ARTL.
According to the statement, MBCPNL has 24 integrated checkposts with exclusive service fee collection rights from commercial vehicles for all key traffic routes in and out of Maharashtra.
It added that MBCPNL is an important gateway connecting Maharashtra with six neighbouring states, which covers over 20 per cent of the commercial road traffic in India.
MBCPNL has an estimated debt of Rs.1,130 crore as on September 30, 2021.
ARTL is a transport infrastructure developer involved in the construction, operation and maintenance of roads, highways and expressways.
Shares of Adani Enterprises closed at Rs 1,430.70 apiece on BSE, down 0.41 per cent.
