Geometric Software Solutions and globa1 engineering services division of Detroit based Modern Engineering have entered into a definitive merger agreement to form a global engineering solutions provider.According to Geometric's release to the BSE, the company will hold 95% stake in the new firm by way of contribution of $23.75 million, of the total equity value of $25 million. The balance 5% stake worth $1.25 million will be invested by Modern's executive.The total transaction value is approximately $32 million, including a working capital loan of approximately $7 million. The engineering services business of Modern Engineering has a current annual revenue of approximately $40 million.Geometric's contribution is funded by approximately $10 million raised through preferential placement of equity with ICICI Venture, and balance through borrowings & internal accruals.The combination of the company and Modern Engineering's Engineering Services Division leapfrogs the combined entity to a premier position in a fast-changing engineering services & PLM market, the release added.
