L&T Technology Services to buy Silicon Valley-based firm for Rs 180 cr

Company's net profit dips by 11.5 per cent

L&T Technology Services (LTTS), the engineering services arm of Larsen & Toubro, said it has signed an agreement to acquire US-based design services provider Esencia Technologies Inc.

The company will pay $27 million (nearly Rs 180 crore) to acquire the California-headquartered firm and $15 million ( Rs 100 crore) will be paid upfront. "The rest will be paid over a period of four years," said Keshab Panda, chief executive officer and managing director, LTTS.

LTTS aims to strengthen its offerings in areas such as perceptual computing, internet of things, advanced silicon products and wireless networking technologies with fast, powerful and smart design tools and signal processing libraries.

Esencia has a team of more than 100 engineers in Silicon Valley.

"The proposed acquisition of Esencia will enhance our global offerings in the area of perceptual computing, advanced silicon and wireless networking technologies. Most important thing is we will be adding 100 people in California, where the technology spend is increasing and we wee see higher demand from our customers," said Panda.

He added that it would have taken the company a longer time to internally build capabilities in such technology areas.

While the company will develop strengths in digital signal processing for communication, security, networking through Esencia, it has also identified other "must have" technologies to achieve faster growth.

LTTS management has also appointed S N Subrahmanyan as vice chairman on its Board with immediate effect.

The company reported 11.5 per cent decline in net profit to Rs 96.5 crore for the quarter ending March 31, 2017 due to appreciation of Rupee against the US dollar. Revenues for the period grew 1.4 per cent to Rs 812 crore. "The dip in profit in Q4 was due to rupee appreciation against dollar. There was no other operational challenges," said Panda.

During the corresponding quarter last year, LTTS posted a net profit of Rs 109.1 crore on revenues of Rs 801.4 crore.

For FY17, the company reported net profit of Rs 425 crore on revenues Rs 3248 crore, as against net profit of Rs 418 crore on revenues of Rs 3066 crore.