| Tata Motors announced on Thursday that its US-based wholly owned subsidiary Tata Technologies Ltd (TTL) would buy British engineering and design services company Incat International Plc for £53.40 million (Rs 411 crore). |
| Tata Technologies will pay Rs 169.40 per share (220 pence) in cash for Incat, a 4 per cent premium on its closing price of 211.5 pence per share on the London Stock Exchange on August 17. |
| Tata Technologies said it had received an undertaking from shareholders owning 35.9 per cent of the UK firm's share capital. The Incat board has approved the offer and recommended that its shareholders accept it. |
| With over 650 employees, Incat services customers in North America, Europe and Asia-Pacific in the automobile, aerospace and engineering industries. |
| "It should take at least 20 days for Tata Technologies to complete the acquisition. The acquisition will globally scale up Tata Technologies' domain expertise in engineering and design, and PLM (product lifecycle management) in the international automotive, aerospace and engineering markets," said Praveen P Kadle, executive director, Tata Motors. |
| If successful, this will be Tata Motors' third major acquisition in the last two years. In April this year, Tata Motors acquired a 21 per cent stake in Hispano Carrocera SA (He), a Spanish bus maker for Rs 70 crore. |
| The company has an option to acquire the remaining 79 per cent stake. |
| In February 2004, Tata Motors acquired Daewoo Commercial Vehicle Co Ltd (DWCV) for a total consideration of $102 million. |
| The Tata Motors stock closed at Rs 492.50 yesterday on the Bombay Stock Exchange, losing 0.26 per cent from its previous closing of Rs 493.80. |
| Incat, set up in 1989, posted a turnover of £65.3 million (Rs 507.32 crore) and a net profit of £1.2 million (Rs 11 crore) in the year ended August 31, 2004. "Incat is a zero-debt company with surplus reserves," said Kadle. |
| 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 international customers in auto, aerospace and engineering industries, said a company release. |
| "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 its future development," Incat Chairman Ross Bunce said in a statement. |
| Patrick McGoldrick, CEO of TTL, said, "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. We are experiencing strong organic growth, which we wish to complement with suitably targeted acquisitions." |
| TTL, set up in 1994, is a subsidiary of Tata Motors Ltd, which holds 94.31 per cent of its equity. TTL recorded a consolidated turnover of Rs 180.43 crore and profit after tax of Rs.7.72 crore in the year ended March 2005. |
| With approximately 2000 employees, TTL services customers in India, the US, Europe and Asia-Pacific. Among its customers are large automobile manufacturers. |
| SHOPPING SPREE |
| FEBRUARY 2004: Daewoo Commercial |
| APRIL 2005: 21% in Hispano |
| AUGUST 2005: Incat International |
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