In yet another acquisition overseas, Tata Group is to acquire UK-based engineering and design services company INCAT International Plc in an all cash deal of Rs 411 crore (£53.40 million).
Tata Technologies Limited, a subsidiary of Tata Motors, on Thursday announced its intention to make a cash offer at 220 pence per share (Rs 169.40 per share) for 100 per cent equity shareholding of INCAT, which is listed on the alternative investment market of the London Stock Exchange, Tata Group said.
The acquisition is to be made through Tata Technologies Inc., US, a subsidiary of TTL and is expected to be completed in 20 days.
TTL's offer price represents a four per cent premium on INCAT's closing price of 211.5 pence a share, as on August 17, 2005, it said, adding, that the value of the total offer is 53.40 million pounds (approximately Rs 411 crore), for INCAT's entire equity holding.
The board of INCAT has approved and recommended acceptance of this offer to its shareholders.
Both TTL and INCAT provide engineering and design service and PLM (product lifecycle management) products and services, primarily to manufacturers and their suppliers in the international automotive, aerospace and engineering markets.
INCAT, established in 1989, posted a turnover of £65.3 million (approximately Rs 507.32 crore) and an operating profit of £2.4 million (approximately Rs 18.65 crore) in the year ended August 31, 2004.
With over 650 employees, INCAT services customers in North America, Europe and Asia-Pacific in the automobile, aerospace and engineering industries.
Tata Motors executive director Praveen Kadle said under the current shareholding pattern for INCAT, the employees and directors hold about 59 per cent while 33 per cent is held by financial institutions. INCAT employees, who would come under the TTL umbrella, he added.
"The acquisition will give TTL greater scale and stronger positions in North America, Europe and Asia. This greater global scale will extend the reach of the enlarged group allowing it to offer a greater range of services to its global customer base," he said.
The offshore capabilities of TTL in the field of engineering automation services combined with the high-end onshore strengths of INCAT are expected to offer a strong and seamless onshore/offshore delivery capability to the international customers in auto, aerospace and engineering industries, he said.
"INCAT's broad geographic platform and extensive customer base represents an accelerated route to achieve our targets. We believe that the enlarged group will be a major player in the engineering and design services market, on a global basis, and it will be better placed to respond to the ever-increasing demands from our combined international customer base," TTL CEO Patrick McGoldrick said.
INCAT chairman Ross Bunce said, "We believe that the offer provides our shareholders with certainty and value. Tata Technologies is a complementary business to our own and the enlarged group should benefit from the greater financial resources and presence, which being a part of the Tata Group will bring to it future development."
TTL recorded a consolidated turnover of Rs 180.43 crore (Rs 1.80 billion) and net profit of Rs 7.72 crore (Rs 77.2 million) for the year ended March 2005 with approximately 2,000 employees.
Tata Motors has earlier acquired heavy vehicles arm of Daewoo Motors and Spanish bus manufacturer Hispano Carrocera.
