The Sterlite Technologies stock closed higher today after the firm said one of its subsidiaries would acquire Metallurgica Bresciana, a European specialised optical cable manufacturer, for 47 million euros in an all-cash deal. The stock closed 8.62% or 25 points higher at 315.05 level on the BSE. The stock which closed at 290 level on Friday opened at 296 level and rose to hit an intra day high of 319.80 on BSE.
The stock gained 97.80% during the last one year and clocked 7.88% rise since the beginning of this year.
The mid cap stock has gained 20% during the last three trading sessions.
12 of 12 brokerages have given "buy" or "outperform" rating for the stock, according to Reuters.
Emkay Global brokerage too has maintained its 'Buy' rating on the stock with target price of Rs 500.
Edelweiss Securities today gave a price target of Rs 425 for 52 weeks. The price of the stock when recommendation was made stood at Rs 290. 05 level. The acquisition, which will be done through Sterlite Technologies' wholly owned Italian subsidiary Sterlite Technologies SpA, is earnings per share (EPS) accretive and the deal is expected to be closed in the coming two weeks, Sterlite said.
"The acquisition is an all-cash deal for approximately 47 million euros, which is being funded through a combination of euro debt instruments and internal accruals," it added.
Metallurgica reported revenue of 48.7 million euros and net income of 4.2 million euros at the close of 2017.
"The acquisition will significantly expand Sterlite Tech's market presence in Europe. It will bring new tier-1 customers, augment product portfolio, and enhance flexibility and ability to better serve the European market," the statement said.
Incorporated in 1987, Metallurgica Bresciana designs and manufactures special precision optical fibre cables and specialised copper cables for various communication applications. It has operations in Italy and China.
"We are delighted to sign a definitive agreement for the acquisition of Metallurgica Bresciana, which will expand Sterlite Tech's optical fibre cabling business by augmenting our access to key European markets and add highly complementary speciality cables to our products portfolio," Sterlite Technologies CEO Anand Agarwal said.
This acquisition aligns with the company's global supply chain strategy of having cabling facilities in close proximity to key customers, to serve their needs for next generation networks, he added.
Sterlite Technologies is a global technology company. The company is engaged in designing, building and managing smarter digital networks. Its digital networks focused business products, services and software includes optical communication products, network and system integration services and operations support systems (OSS)/business support system (BSS) software solutions. It operates in six continents and more than 100 countries.
The company operates through manufacturing facilities in India, China and Brazil. Its portfolio consists of approximately 155 patents.