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Tata Motors to buy UK firm for Rs 411 crore
Combined entity to have greater reach in North America, Europe and Asia
BY OUR BUSINESS CORRESPONDENT
18 August, 2005: Tata Motors is acquiring the UK-listed INCAT International Plc, through its subsidiary Tata Technologies Ltd. The offer for 100% of the British company is being made by Tata Technologies US. The acquisition will cost Tatas approximately Rs 411 crore.
Established in 1994, Tata Technolgies Ltd is a subsidiary of Tata Motors, which owns 94.31% of its equity. Tata Technologies clocked consolidated sales of Rs 180.43 crores and profit after tax of Rs 7.72 crores in the financial year ended March 2005. Tata Technologies has about 2000 staffers and caters to customers in India, US, Europe, and Asia-Pacific. Several large automobile manufacturers in India and overseas are its clients.
With over 650 employees, INCAT services clients in North America, Europe and Asia-Pacific in the automobile, aerospace and engineering industries. Established in 1989, INCAT clocked sales of £ 65.3 million (about Rs.507.32 crores) and an operating profit of £ 2.4 million (about Rs.18.65 crores) in the financial year ended August 31, 2004.
The cash offer is made at at 220 pence per share (Rs 169.40 per share) for 100% of the equity of INCAT International Plc, a UK-based company listed on the Alternative Investment Market (AIM) of the London Stock Exchange. Tata Technologies' offer price is a 4% premium to INCAT's closing price of 211.5 pence per share, as on August 17, 2005. The value of the total offer is approximately Rs 411 crores, for 100% of INCAT's equity shares.
The INCAT director board has already approved the Tata offer and recommended acceptance of this offer to its shareholders.
Both Tata Technologies and INCAT offer engineering and design services and PLM (product lifecycle management) products and services, mainly to auto, engineering and aerospace manufacturers and their suppliers.
The offshore capabilities of Tata Technologies in engineering automation services added to 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, Tata Motors said in a press release.
"The prospect of INCAT joining forces with TTL represents an exciting opportunity to advance our strategic aims. We are experiencing strong organic growth, which we wish to complement with suitably targeted acquisitions. 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. On completion of the Offer, I look forward to welcoming the management and staff of INCAT to Tata Technologies and working with them to achieve enhanced stakeholder value in the future," said Mr. Patrick McGoldrick, CEO of Tata Technologies.
"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," said Dr Ross Bunce, Chairman of INCAT.
Tata Technologies expects the acquisition to bring greater scale and stronger positions in North America, Europe and Asia. This bigger international scale will extend the reach of the enlarged group allowing it to offer a greater range of services to its global customer base.
BY OUR BUSINESS CORRESPONDENT
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