KPIT Cummins acquires CG Smith Software

BANGALORE: KPIT Cummins Infosystems Ltd, a global IT consulting organization focused on the Automotive & Semiconductor sectors, today announced that it has acquired Bangalore based CG Smith Software Pvt Ltd, focused in the realm of embedded and real-time systems for automotive electronics.

The all-cash acquisition is for a consideration of Rs 38 crores (Rs 35 crores upfront and balance

upon fulfillment of certain performance conditions) and CG Smith Management team will continue to lead.

With this acquisition, CG Smith Software's expertise in automotive cluster and safety systems strengthen KPIT Cummins in Powertrain and Body electronics advanced technology solutions.

KPIT Cummins expects 25 percent revenue from its automotive & semiconductor division in next financial year. Also to grow from 500 to 700 people and to target 1000 employees in next 12-18 months in this division. Meanwhile CG Smith Software is expected to have revenues of Rs.288 Million, with a profit of Rs.28 Million for FY0506

Commenting on this acquisition, Ravi Pandit, Chairman and Group CEO, KPIT Cummins, said, “This, coupled with our global footprint, account management strengths and automotive focus

will enable the integrated entity to be a dominant player in Automotive Electronics thus creating

more value for our global stakeholders. This development combined with our recent acquisitions in US & France and a JV in Germany sets us on a trail of significant growth in years to come.”

CG Smith Software was a 50:50 partnership between Crompton Greaves Ltd and Smith & Co. Inc.

Raghavendra Swamy, President & COO, CG Smith Software said: “This is an important milestone in 10+ year journey of CG Smith Software. We have found an excellent partner in KPIT Cummins. There is synergy in focus, specialized market verticals, industry segments and complementary skills and domain knowledge in the common business practices. Added to it, the sales and marketing strength of KPIT Cummins with offices spread in different geographies makes it a perfect fit to fuel the growth aspirations of CG Smith Software and its employees while creating value for customers.”

The deal is subject to legal and other clearances which are likely to get completed by June 2006.

Avendus Advisors Pvt. Ltd. advised KPIT Cummins on the deal.