Tata Tech to acquire U.K. firm INCAT International

Staff Correspondent

MUMBAI: Tata Technologies Ltd. (TTL) through its subsidiary, Tata Technologies of the U.S. (TTUS), on Thursday announced its intention to make a cash offer at 220 pence per share (Rs. 169.4 per share) for 100 per cent of the equity shareholding of the U.K.-based INCAT International plc., involved in engineering design services.

TTL is a subsidiary of Tata Motors, which holds 94.3 per cent of its equity. It recorded a consolidated turnover of Rs. 180.4 crore and a profit after tax of Rs. 7.72 crore in 2004-05.

It has around 2,000 employees and services customers in India, the USA, Europe and Asia Pacific. Among its customers are large automobile manufacturers in India and abroad.

INCAT is listed on the Alternative Investment Market (AIM) of the London Stock Exchange. TTL's offer price represents a four per cent premium on INCAT's closing price of 211.5 pence per share as on August 17. The value of the total offer is 53.4 million pound sterling (about Rs. 411 crore) for 100 per cent of INCAT's equity shares. The INCAT board has approved and recommended the acceptance of the offer to its shareholders.

Both TTL and INCAT provide engineering and design services and PLM (product lifecycle management) products and services primarily to manufacturers and their suppliers in the international automotive, aerospace and engineering markets.

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 the international customers in auto, aerospace and engineering industries.

INCAT posted a turnover of 65.3 million pound sterling and an operating profit of 2.4 million pound sterling in the year ended August 2004. With over 650 employees, INCAT services customers in North America, Europe and Asia Pacific in the automobile, aerospace and engineering industries.

The acquisition is expected to give TTL greater scale and strong positions in North America, Europe and Asia.

This greater global scale will extend the reach of the enlarged group allowing it to offer a wide range of services to its global customer base.

Patrick McGoldrick, CEO, TTL, said, "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."

Ross Bunce, INCAT Chairman said, "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.''