The Board of Directors of KPIT Technologies Ltd on 6 May approved the 100% acquisition of four Caresoft entities, which are Caresoft Global Technologies, CAREGLOTECH de RL de CV, Caresoft Engineering Services, and OXI SRL.
According to KPIT Technologies’ exchange filing, the transaction will take three years to complete.
The entire acquisition cost is anticipated to be $191 million, including a $25 million variable component based on meeting particular revenue and business synergy targets. KPIT can pay for the acquisition in one or more tranches over four years, using either cash or equity shares.
Caresoft Global will split its operations into two segments: benchmarking and engineering solutions. KPIT will purchase the global engineering solutions business, which is largely focused on off-highway, truck, and bus segments, as well as Manufacturing Solutions.
The acquisition of Caresoft Entities’ engineering solution division would increase operating margins, according to KPIT Tech. The company will continue to work with Caresoft in the benchmarking business.
The company expects business synergies in the following areas:
- Reduced costs and expanded downstream engineering services in the Commercial Vehicle and Off-Highway categories.
- Caresoft Engineering Services has been integrated into KPIT’s Top 25 (T25) client list.
- The expansion of KPIT’s Engineering Services to Caresoft’s global client base.
- Acceleration of KPIT’s entry into the Chinese market.
- Entry into the software benchmarking market.
Kishor Patil, Cofounder, CEO, and MD of KPIT Technologies, stated that the company is strengthening its partnerships with truck and off-highway manufacturers and accelerating its expansion into China.
Caresoft is a market leader in automotive benchmarking and cost-effective engineering solutions, primarily in the off-highway and commercial vehicle segments.
“We will jointly deliver more value to our automotive customers in terms of technology, cost, and speed to market,” said Caresoft Global CEO Mathew Vachaparampil.
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