Minda Industries Ltd has agreed to acquire the business related to telematics hardware products from KPIT Engineering Ltd and Impact Automotive Solutions Ltd for an initial payment of Rs 25 crore (about $3.5 million).
Minda said in a stock-exchange disclosure there will be certain milestone related payments based on performance over the next 30 months. The agreement is subject to customary closing conditions and approvals.
The products are vehicle telematics system AIS 140, On Bus Integrated Telematics Systems OBITS, and products for school buses. Minda will be a preferred supplier to KPIT Engineering for other telematics hardware products.
“With AIS 140 notification being released by the government this year and its implementation with effect from January 2019, we believe that this segment will offer opportunity for growth and expansion,” said Nirmal K Minda, chairman and managing director at Minda Industries.
The Ministry of Road Transport and Highways along with the Automotive Research Association of India have framed the AIS 140 standard, which makes it mandatory to install approved telematics devices in all public carrying vehicles.
Kishor Patil, chief executive officer at KPIT Technologies, said the deal is in line with its redefined strategy to focus on software development and integration for mobility.
Incorporated in 2018, KPIT Engineering Ltd was demerged out of KPIT Technologies. Impact Automotive is a subsidiary of KPIT Engineering.
Equirus Capital acted as the sole adviser for this transaction.
KPIT Technologies provides IT consulting and product engineering solutions and services to automotive, manufacturing, energy and life sciences companies. It has technology centres in Europe, the US, Japan, China and India.
In January last year, CK Birla Group-owned Birlasoft and KPIT said they would merge to create a $700-million entity, before splitting into two independent public listed companies focussing on specialised businesses.
Minda Industries is the flagship company of auto components maker UNO MINDA Group. Minda’s automotive product portfolio is spread across switches, lighting and acoustics categories.