L&T Technology Services Ltd, the engineering services division of conglomerate Larsen & Toubro Ltd, has signed a share purchase agreement to acquire United States-based Orchestra Technology, Inc. for $25 million (Rs 187 crore).
In a filing with stock exchanges, Mumbai-based L&T Technology said the acquisition will help it to strengthen its presence in the telecom original equipment manufacturer (OEM) and service provider space.
Based in Dallas, Orchestra specialises in wireless and mobile ecosystems. The company provides high-value engineering services and solutions for the telecom industry in areas such as network engineering and operations, and enterprise mobility.
The acquisition will take place in two tranches. L&T Technology will provide an upfront payment of $11 million, with the remaining $14 million being paid in the form of earn-outs and retention pay over three years.
“Orchestra's capability in enabling OEMs and service providers to manage and optimise network performance will form a key differentiator as 5G rollouts take off across geographies,” L&T Technology said in its filing.
US-based Orchestra reported a turnover of $10.3 million, $9.8 million, and $15.1 million for the 2017, 2018 and 2019 calendar years.
Shares of L&T Technology Services ended trading on Monday 1.89% up at Rs 1,405 apiece. The company reported consolidated net sales of Rs 5,619.1 crore for the 2019-20 financial year, with profit-after-tax figures of Rs 822.4 crore for the same period.
L&T Technology focuses on engineering, and research and development services. The company went public in September 2016 with a Rs 890 crore initial public offering.
The company has made acquisitions to boost its market capabilities and product portfolio.
In September 2018, it acquired Bengaluru-based Graphene Semiconductor Services Pvt. Ltd for Rs 93 crore (about $12.9 million) in cash.
At the time, L&T Technology said the acquisition would strengthen its footprint in the very large-scale integration chip design space.
In May 2017, it acquired US-based design services provider Esencia Technologies Inc for $27 million (around Rs 173.4 crore).
