Calcutta, May 16: McNally Bharat Engineering Co Ltd is set to pick up a 68.28 per cent stake in Sayaji Iron and Engineering Co Ltd for Rs 59 crore.

The company today signed a memorandum of understanding with the Sayaji promoters, and according to the Sebi takeover code, McNally will make an open offer.

According to McNally chairman Deepak Khaitan, “McNally has great potential and will become the largest company of our group when it doubles the turnover to Rs 1,200 crore this fiscal.”

“This acquisition has product and technology synergy and adds sizeable volume to our equipment business. We will also expand our Asansol plant to incorporate the range of crushers as the demand in the eastern region will be growing in the iron ore, cement and limestone mining sector,” Khaitan said.

Sayaji, with its plant located at Vadodara in Gujarat, has eight marketing offices and manufactures a wide range of equipment used in crushing, grinding, screening, road making, construction and material handling.

Sayaji has well-absorbed overseas technology in the area of vibrating screens, cone crushers, impact breakers, hammer mills, roll crusher, concrete batching plants and asphalt pave finishers.

Sayaji, which is projected to have a turnover of Rs 70 crore in 2008-09, also manufactures equipment for steel, cement, power and coal plants.

“For McNally we expect to end 2007-08 with a revenue of over Rs 600 crore and will have to double it next year to fulfill our order book of Rs 3,200 crore,” Khaitan said.

“However we still see projects comprising bulk of our revenue with the balance being made up of manufacturing products. This is where Sayaji’s expertise of complex turnkey projects will also come in handy,” he added.

McNally is eyeing more such acquisitions with a projected compound annual growth rate of 40 per cent in the next three years.