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Home arrow News arrow Mergers and Acquisitions arrow KPIT Cummins buys mechanical design services business of Harita TVS
KPIT Cummins buys mechanical design services business of Harita TVS Print E-mail
Written by Vijay   
Thursday, 10 July 2008
Mumbai: KPIT Cummins Infosystems Ltd. (BSE: 532400; NSE: KPIT) the leading Product Engineering Partner to Global Manufacturing corporations today announced that it has taken over substantial part of the Mechanical Design Services business of Harita TVS Technologies (known as TVS-E Technologies Ltd in India).

With the addition of the high end Mechanical Design Engineering capability from Harita, KPIT Cummins strengthens its existing portfolio of Automotive Embedded & Mechanical Engineering Services.

It will now also offer integrated Mechanical Product Design, Development and Validation Services to existing and new global clients in the Automotive & Industrial Verticals.

Highlights of the Acquisition

Ø       Accretional revenues of nearly Rs 15 Crores
Ø       KPIT Cummins to acquire around 100 specialized employees from Harita TVS with core mechanical design competencies in product design & validation for Automotive and Industrials products and systems
Ø       20+ customers of Harita TVS across North America, Europe and India to transition to KPIT Cummins ; some customers  will continue to be supported by Harita
Ø       KPIT Cummins strengthens its current Product Engineering Services portfolio by adding specialized mechanical design solutions in plastics, sheet-metals, castings & forgings  for its Automotive & Industrials clients

What the deal means to KPIT Cummins

Sharpened focus on the vision of becoming the No. 1 Global Product Engineering Partner to clients in the Automotive and Industrials verticals helping them bring complex technology products/systems faster to their global markets

1.      Opportunity to work with 20+ customers from Harita TVS across North America, Europe & India; 80% of acquired customers to engage with KPIT Cummins for the first time
2.      Mechanical Engineering portfolio expands:
a.       Broadens to provide Mechanical Design Engineering along with Embedded Engineering Services for Automotive and Industrials Verticals.
b.       Deepens Mechanical Engineering Services capability to now offer Product Design Development and optimization, including validation & verification of products and systems for Automotive Interior and Exterior; specifically in Plastics, Sheet-metals, forgings and Castings using high-end 3D Modeling and Analysis tools.
3.       Potential to grow the Mechanical Design Engineering practice to 1000+ in the next three years
a.        Specialised Mechanical Design professionals from Harita to complement KPIT Cummins’ existing 100+ employees in the practice

Commenting on this acquisition, KPIT Cummins Chairman and Group CEO Ravi Pandit said, “Our acquisition strategy has always been aligned with our vision to become leaders in the focused verticals. By acquiring substantial part of Harita TVS, we aim to become the leading Global Product Engineering Partner to our existing & potential clients in the Automotive and Industrials verticals.

We thank the leadership and committed team of Harita who have chosen to be a part of KPIT Cummins family and welcome them onto an exciting journey in Mechanical Engineering Services for which we share a common vision and passion”.

KPIT Cummins CEO & Managing Director Kishor Patil said,  “We have a competent team of qualified professionals in Harita TVS who have built the domain capability over the years. With the addition of high end mechanical design engineering services, we look forward to better address the needs of our global customers specifically in the Automotive product designs contributing to a multitude of innovations in weight reduction, product life, ergonomics and also fuel efficiency.

Together we see a true synergy between the two companies for our employees and customers”.

Commenting on this transaction, Mr. Gopal Srinivasan, Chairman of Harita TVS, said “Mechanical Design Services transfer is an excellent strategic decision to scale up the business. Harita’s expertise has already created a strong and satisfied customer base. We are sure that KPIT will enhance the existing opportunities for the customers in terms of new services and offerings to continue the outstanding work performed by our Team. There is a lot in store for the global automotive customers”.

Harita has opted for growth by partnering with a larger firm to enable the business to scale up. Harita with its deep auto domain expertise, process centricity and a committed team accompanied with KPIT’s global footprint, account management strength and auto focus will enable the integrated entities to emerge as a dominant player in the automotive sector.

Although the Mechanical Design Services business, owned by Harita TVS Technologies will be transferred to KPIT Cummins along with employees, strategic key customers and assets in India, North America and Europe, the legal entities at North America and Europe will remain with Harita TVS during the transition period.

 
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