L&T Technology Services scouts for acquisition in North America, European markets for sub-$50 million companies

Rajesh Kurup Mumbai | Updated on February 03, 2021

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L&T Technology Services Ltd (LTTS), a subsidiary of business conglomerate Larsen & Toubro (L&T), is on the prowl in North America and European markets to acquire technology firms with sub-$50 million in annual revenues.

The firm is scouting for companies with expertise in software product development, healthcare product development, automotive software development and independent software vendors. Any acquisition in any of these areas would help the global pure-play engineering services company expand its capabilities in its existing industry verticals.

“As a technology and engineering company, LTTS is constantly looking at niche white spaces. At any given time, we have a portfolio of target companies in a number of new age domains. LTTS has a dedicated M&A team evaluating and looking into each of these sectors. For LTTS it is not the size of the acquisition but the technology capabilities that really matter,” LTTS Chief Financial Officer CFO Rajeev Gupta told BusinessLine.

“Currently, new age digital technologies make up almost half of our revenues and we are looking to grow our offerings in diverse areas such as Medical IoT, Industrie 4.0, Autonomy, Machine Learning and 5G to gain market share across all our industry verticals,” he added.

In past four years, LTTS, which is also the technology services arm of L&T, has done three acquisitions to boost its product portfolio.

In May 2017, the company announced the acquisition of US-based design services provider Esencia Technologies Inc for $27 million (about ₹173.4 crore) in an all-cash deal. In September 2018, it executed a definitive agreement to acquire Bengaluru-based Graphene Semiconductor Services for $12.9 million (₹93 crore) in an all-cash deal.

Later in July 2020, LTTS acquired Texas-based Orchestra Technology, a company providing engineering services and solutions for telecom network management, in all-cash deal of $25 million (₹187 crore).

The company, which signed its largest deal of $100 million in the quarter ended December, is also pursuing deals in the $25-50 million range.

Joining the line of other IT firms, LTTS is also planning to provide salary hikes in phases with the company gearing up to provide increments to junior employees effective April 1 and that of senior staff by July.

Published on February 03, 2021

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