During Tuesday’s trading session, shares of a leading independent software development and integration partner are in focus on the stock exchanges, after the company’s Board approves a 100 percent acquisition of Caresoft’s Global Engineering Solutions Business for a deal of $191 Million.
With a market capitalisation of Rs. 34,339 crores, the shares of KPIT Technologies Limited hit an intraday high at Rs. 1,270 on BSE, up by around 1 percent, as against its previous closing price of Rs. 1,257.8. The stock has delivered negative returns of nearly 17 percent in one year, but gained around 17 percent returns in the last one month.
What’s the News
According to the latest regulatory filings with the stock exchanges, the Board of KPIT Technologies Limited has approved the acquisition of Caresoft’s Global Engineering Solutions Business.
The acquisition encompasses a 100 percent stake in four entities: Caresoft Global Technologies, Inc. (USA), Caresoft Engineering Services Limited (UK), CAREGLOTECH de RL de CV (Mexico), and OXI SRL (Italy). Collectively, these entities are referred to as the ‘Caresoft Entities.’
Caresoft Global, a leader in automotive benchmarking and cost reduction-driven engineering solutions, will restructure its business into three business units: 1. Benchmarking, Technology Optimisation & Cost Reduction Engineering, 2. Engineering Talent Solutions and 3. Engineering Solutions.
KPIT Technologies will acquire the carved-out Engineering Solutions division of Caresoft Global on a global scale. This division primarily serves the Off-highway, Truck and Bus sectors, in addition to providing Manufacturing Engineering Solutions. Meanwhile, KPIT will partner with Caresoft in their Benchmarking business.
Aligned with KPIT’s strategic focus on the commercial vehicle market, the acquisition is expected to deliver multiple benefits, including access to Caresoft’s strong industry relationships and domain expertise in the truck and off-highway segments, acceleration of KPIT’s presence in China, and providing manufacturing engineering solutions for the mobility segment.
The total acquisition cost will be up to $191 million, including $25 million variable consideration based on the achievement of revenue and other business synergy milestones. Payment can be made in one/more tranches over 4 years with cash and/or equity shares at the option of KPIT for an amount not more than $25 million, subject to shareholder approval.
Financial Performance
KPIT Tech reported a significant growth in its revenue from operations, showing a year-on-year rise of 16 percent from Rs. 1,318 crores in Q4 FY24 to Rs. 1,528 crores in Q4 FY25. Similarly, its net profit increased during the same period from Rs. 166 crores to Rs. 245 crores, indicating a rise of around 47.6 percent YoY.
About the Company
KPIT Technologies Limited is a leading independent software development and integration partner helping mobility leapfrog towards a clean, smart, and safe future.
With 12,000+ automobelievers across the globe, specialising in embedded software, AI & Digital solutions, KPIT enables clients to accelerate the implementation of next-generation mobility technologies.
Written by Shivani Singh
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