MindTree buys Kyocera Wireless' Indian unit
29 September 2009
Indian software company MindTree Ltd today said it is buying Kyocera Wireless India Pvt Ltd, the Indian arm of the San Diego-based mobile handset maker Kyocera Wireless Corp, for an upfront payment of $6 million (Rs29 crore).
Further cash payments will be based on the local unit of Kyocera meeting certain revenue targets in the fiscal years ending March 2011 and 2012, MindTree said in a statement from Bangalore. It did not provide the revenue targets and the total potential value of the transaction.
Kyocera Wireless India, employs 600 people, and develops custom wireless handsets for Indian service providers. The unit will continue to provide product-development, testing and software-engineering services to its current parent and other Kyocera entities on a contract basis, the statement said.
MindTree expects the acquisition to contribute about $9 million (Rs43 crore) in revenues for the period from Oct 2009 to March 2010, with profit after tax expected to be in the range of 13-15 per cent.
"This acquisition makes them (Kyocera) a major strategic client for MindTree," Janakiraman S, MindTree president and group chief executive, product engineering services, said in the statement. The deal will help fuel growth of MindTree's product engineering services business under which it offers design and technology services including wireless technology, he added.
"Wireless technologies form a critical element in this space. The acquisition, and our relationship with Kyocera, will fuel MindTree's growth in the global PES market," MindTree chief executive and managing director Krishnakumar Natarajan said.
Yasuyuki Yamamoto, general manager, Kyocera Corp, added, "This allows Kyocera to improve its cost structure and competitiveness while providing MindTree a strong engineering resource."
The acquisition is subject to legal and statutory requirements as well as certain closing conditions.