Indian outsourcer Wipro will acquire U.S. mechanical design firm Quantech Global Services and its Indian subsidiary in an all-cash deal, Wipro announced Monday.
The acquisition will add mechanical design to the services Wipro already offers product companies, said A.L. Rao, Wipro chief operating officer. Wipro already designs embedded software and hardware for companies such as the top five mobile phone makers and top-tier telecom equipment vendors, he added.
Quantech, with revenue of US$12.7 million last year, offers CAD and engineering services to automotive makers, aerospace companies and consumer-product makers. Quantech’s clients include General Motors, Nissan Motor and DaimlerChrysler, said Mukesh Gandhi, chief executive officer of Quantech of Michigan.
Wipro of Bangalore did not disclose the deal’s financial details. The acquisition’s value is likely to be about $10 million, a part of which would be paid up front when the deal closes and the balance if financial targets are reached over a three-year period, said Sudip Nandy, chief strategy officer of the company’s Wipro Technologies business.
Besides selling mechanical design services to its current customer base, Wipro also plans to cross-sell its other product design services to the automobile sector from which Quantech earns most of its revenue, Rao said.
Quantech’s 500 staff in the United States and India will be absorbed into Wipro, Nandy said. The deal is expected to be final in one month.
-John Ribeiro, IDG News Service
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