Wipro buys Quantech Global for $10 mn

Wipro Technologies is acquiring US-based Quantech Global Services for $10 million in an all cash deal to strengthen its competence in mechanical engineering design and analysis services.

Quantech is a 16-year old firm with a topline of $12.7 million. The company, in addition to the automotive sector, also has an expertise in aviation design.

The consideration includes upfront cash payment on closure of the transaction as well as earn-outs on achieving agreed financial targets over a three-year period. Wipro, with this deal, is equipping itself for the large offset business which is expected to flow into India from the Airbus deal.

The IT major will absorb Quantech's entire team of 500 employees in Bangalore and Hyderabad centres and would serve its 20 clients including General Motors, Daimler Chrysler and Nissan, among others.

Quantech undertakes design, analysis, development and programme management of products right from concept to pre-production stage.

This is the second acquisition in this space for Wipro after it acquired NewLogic, a system on chip design firm for Rs 240 crore ($56 million) in December 2005.

Announcing this acquisition, A L Rao, COO, Wipro Technologies said: "The demand for complete product engineering services is on the rise. Quantech's key strength in mechanical design services complements our core strength of embedded software and system design capabilities and helps us strengthen our position as an original design engineering solutions provider."

Sudip Nandy, chief strategy officer, Wipro said: "The acquisition is another 'pearl' added to the 'string' in keeping with our articulated strategy and is an important step in our journey to offer a complete portfolio of engineering designing services."

The product engineering services arm of Wipro, one of the largest in India, recently reported $500 million topline with 13,500 people.

The CADAM services under this division currently accounts for around 1 per cent with around 100 people and Wipro expects this business to contribute around 10 per cent in three years time to the the product engineering services arm.

Said Mukesh Gandhi, CEO, Quantech: "This is a win-win partnership where our clients will benefit from Wipro's broad suite of capabilities and proven global services delivery."

:Coupled with Wipro's expertise in product engineering solutions in the embedded and telecom domain, we are confident that the new combined entity is well positioned to offer better offerings in the mechanical design and analysis space," he added.