Marathon Edge-backed KPIT Technologies strikes over $100-mn deal

 Marathon Edge-backed KPIT Technologies strikes over $100-mn deal

KPIT Technologies, a software integration partner for the automotive and mobility industry, said Wednesday it is acquiring Munich-headquartered Technica Engineering.

Technica specializes in production-ready system prototyping (a combination of network system architecture, hardware prototyping, integration), automotive ethernet products, and tools for validation. Apart from Munich, it has a presence in Spain, Tunisia, and the USA, with a team of more than 600 engineers.

The deal is expected to be closed by the end of next month and will be EPS accretive upon consolidation, KPIT said.

KPIT said it will pay €80 million ($79.3 million) over the next six months and an additional milestone-linked amount that could be up to €30 million ($29.7 million) to be paid by March 2025.

The target company had consolidated revenue of €43 million with 20% EBITDA margin last year.

“The mobility industry is using software to drive innovation and is creating a post-vehicle sale business model driven by delivering services to end consumers. We are constantly looking for possibilities to help accelerate our client’s vision,” said Kishor Patil, co-founder, CEO and MD of KPIT Technologies.

“With Technica Engineering, we will strengthen the value and scale of operations across the stack. We have common strategic clients who will benefit, and we also get access to leading disruptor mobility tech companies,” Patil said.

KPIT, which counts private equity-style investor Marathon Edge as a shareholder with a 1.48% stake, has engineering centres in Europe, the USA, Japan, China, Thailand and India. It has seen its revenues almost quadruple and its net profit grow five times over the last three years. The company’s share price rose six-fold in the last two years alone.

The latest acquisition made sure the stock was buzzing today even as the benchmark stock indices fell around 0.5%.

KPIT Technologies ended the day up nearly 4% after it announced the acquisition, which would likely add 10-15% to its annual topline and bottomline numbers hereafter.

Vivek Sinha

error: Content is protected !!
The Capital Quest