Tata Tech buys US-based Cambric for $32.5 million

Mumbai: In a bid to increase revenues from Europe, engineering services company Tata Technologies has acquired Cambric Corporation for $32.5 million (roughly Rs 175 crore).

The deal gives the company, which is a subsidiary of Tata Motors, access to three development centres in Romania, Tata Tech’s Managing Director and Chief Executive Officer Patrick McGoldrick said at a news conference today.

Of the $32.5-million deal, $30 million will be the cash component and the remaining will be milestone-linked payouts, company officials indicated.

In addition, sources said, the company is to benefit from Cambric’s existing clientele in the construction and heavy equipment space, including marquee names such as Caterpillar and CNH. Cambric’s existing customers will also have the option of being serviced by the Tata group company centres in India.

The US-headquartered Cambric is a privately-held company and reported revenues of $25 million as on December 31, 2012. It provides system engineering and design capabilities in engine, power train, chassis and structures, electrical and hydraulic systems, to its customers. The company employs 450 engineers in the US and Romania.

Post the completion of the transaction, Cambric will become a unit of the Indian company, McGoldrick said. The transaction is expected to be concluded by May, he said, adding that he did not foresee any problems in integrating the two companies.

The $250-million Tata Tech renders services to clients across 25 countries. In the current fiscal, the company will spend $14 million in capital expenditure, President Global Services and Chief Operating Officer Samir Yajnik had said in an earlier interaction.

IPO Plans
In 2011, Tata Tech completed a round of equity funding for Rs 141.06 crore from two Tata Capital-managed companies. Though analysts see this a pre-cursor to an initial public officering, McGoldrick is elusive.

“Listing is a decision for the board to take. All throughout, we have been financing growth through cash generation. If the board and our shareholders decide we should be listed, my job is to make that happen,” said McGoldrick.