L&T Technology Services, a wholly-owned subsidiary of $14.3 billion Larsen & Toubro (L&T), has acquired 74 per cent stake in Thales Software India Pvt Ltd to grow its avionics business, as per a stock market disclosure. The firm did not disclose the deal amount.
Post acquisition, L&T Technology Services will manage and oversee the management control, operations and delivery of services of the new joint venture in which Thales has retained the remaining 26 per cent stake.
Thales will help the company develop latest trends in the avionics industry, one of its core businesses. It should enable Thales to select this new group as its Indian offset partner, resulting in inflow of offset related revenues in the joint venture.
Offset partnerships are common globally as part of the government’s defence related contracts which allows local procurement of a portion of big purchases for local industrialisation besides national security.
"The collaboration brings on-board a seamless integration of all elements and assures our customers quality service and highest level of long-term, local product support," said Eric Lenseigne, MD, Thales in India.
Thales Software is an Indian subsidiary of France-based Thales which is the global technology leader in aerospace, transportation and defence and security markets. In 2013, the firm generated revenues of €14.2 billion.
"We are currently streamlining our expertise and strengthening our knowledge. In such a phase, this collaboration adds to L&T Technology Services' growing competencies," said Keshab Panda, chief executive, L&T Technology Services.
L&T Technology Services offers design and development solutions throughout the entire product development chain across various industries such as industrial products, medical devices, transportation and telecom.
Last month, L&T said that it is planning to start IPO process for both of its technology subsidiaries—L&T Technology Services and L&T Infotech in July 2016.
In FY14, L&T had consolidated net revenue of Rs 85,128.4 crore, reporting a growth of 14.26 per cent from Rs 74,498 crore in the previous fiscal. Of this, L&T Technology Services and L&T Infotech together reported an income of Rs 110 crore.
(Edited by Joby Puthuparampil Johnson)