L&T Technology Services (LTTS) on Thursday (12 January 2023) announced that it will acquire the Smart World & Communication (SWC) business of its parent firm, Larsen & Toubro (L&T) for a cash consideration of Rs 800 crore.
In an exchange filing, LTTS said, The board of directors has approved and executed business transfer agreement (BTA) with L&T to acquire Smart World & Communication business of L&T which consists of safe & smart, communication and cyber security as a going concern, on a slump sale basis.
With the acquisition, LTTS plans to combine synergies and take offerings in next-gen communications, sustainable spaces and cybersecurity to the global market.
Smart World & Communication was founded in 2016 to cater to the demands in smart cities, address opportunities and provide smart solutions in the areas of end-to-end communications, city surveillance and intelligent traffic management system for the Government as well as enterprises. It has an employee base of over 700 engineers from diversified technology domains and has crossed an annual revenue of Rs 1,000 crore.
The company said that the L&T's SWC business will be acquired for a cash consideration of Rs 800 crore. The acquisition is expected to be completed on or before 31 March 2023, subject to satisfaction of conditions precedent identified under the business transfer agreement.
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LTTS said that the proposed acquisition is a progression of the company's 6 Big Bets strategy that will open new avenues of growth in 5G, digital products & AI, and sustainability.
The coming together of the LTTS and SWC teams will address the entire gamut of digital offerings including design, architect, build & operate, effectively catering to the portfolios encompassing next-gen communications, sustainable spaces and cybersecurity.
The firm stated that the SWC's strong expertise in the area of next-gen communications has been instrumental in the network design, planning, implementation and management including Network Operations Center (NOC), OSS, Datacenter, Cloud/Private 5G of over 25,000 locations across India.
SWC has assisted multiple state governments in India with network operating centers and network management systems while establishing end-to-end network connectivity projects such as TANFINET and Telangana Fiber Grid. SWC has created gEDGE data centers with a lot of innovation resulting in up to 40% reduction in power consumption and up to 30% savings in capex, it added.
S. N. Subrahmanyan, chief executive officer & managing director, Larsen & Toubro said, Smart World & Communication has created a niche for itself in the communications and smart spaces domain across developing markets. By combining with a global engineering services player like LTTS, its offerings across next-gen networks, smart spaces, and cybersecurity will help unlock new synergies across the technology spectrum. LTTS is well-positioned to take these capabilities to the global market, cementing its robust leadership in the engineering and technology domain.
Amit Chadha, CEO & managing director of LTTS, said The acquisition of SWC is a progression of LTTS' 6 Big Bets strategy with a direct bearing on 5G, Digital Products & AI, and Sustainability. SWC's capabilities will enhance LTTS' differentiation in the exciting field of next-gen communications with cutting edge solutions around 5G networks, sustainable spaces, along with a full stack of cybersecurity solutions to our global clientele.
He further added, The combined team of LTTS and SWC will take these offerings incubated in India to the World while bringing best practices to Indian and global customers. On behalf of all employees at LTTS, I express my gratitude to the L&T management for putting their confidence in us and extend a warm welcome to all our colleagues at SWC. Look forward to doing exciting transformational programs together.
Larsen & Toubro (L&T) is an Indian multinational engaged in EPC projects, hi-tech manufacturing and services. It operates in over 50 countries worldwide.
LTTS is a listed subsidiary of Larsen & Toubro focused on Engineering and R&D (ER&D) services. It offers consultancy, design, development and testing services across the product and process development life cycle.
The company reported 3% rise in consolidated net profit to Rs 282.4 crore on a 6.5% rise in revenue to Rs 1,995.1 crore in Q2 FY23 over Q1 FY23.
Shares of L&T Technology Services tumbled 5.33% to Rs 3446.40 and Larsen & Toubro shed 0.70% to Rs 2145.10 on the BSE.
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