According to highly-placed industry sources, the deal size is Rs 500-600 crore and an announcement would be made soon. "The deal is more or less complete, and it's just a matter of announcement now," the sources added.
On the back of strong demand for product engineering services in key markets, QuEST Global, which has Warburg Pincus as one of its prime investors, has charted out an aggressive inorganic growth strategy. In February this year, the company had acquired Beeken TechQuest, a US-based company focused on engineering outsourcing in the oil & gas business, in February this year. In December 2011, it had acquired the engineering services division of UK-based GKN Aerospace Services for an undisclosed sum.
In March this year, QuEST Global has spun off its manufacturing business as a separate company in order to bring greater focus on the services business. The new entity, Aequs, is now completely owned by co-founder Aravind Melligeri and his family.
In response to a query, a spokesperson of QuEST Global said the company is committed to its stakeholders and customers to delivering best-in-class engineering solutions. He, however, declined to comment on this specific acquisition. "We will continue to make strategic investments that could be organic and inorganic to enable us to add greater value to our customers and stakeholders. However, at this juncture, the management at QuEST Global wishes not to respond to any speculations that may be doing the rounds."
An email sent to NeST Group did not evoke any response.
Kochi-headquartered NeST Technologies (NeST Group) was founded in 1998 by Javad K Hassan, who started his entrepreneurial dream after years of experience working in the field of semiconductor development and manufacturing in global companies such as IBM and then APM Inc. The NeST Group with its flagship companies such as SFO Technologies and NeST Software has a turnover of $200 million (Rs 1,200 crore). The company employs about 3,500 people across its facilities located in Trivandrum, Kochi, Bangalore, Mysore and in the US. According to sources in the know, the engineering services business which is being sold to QuEST Global Engineering used to be part of SFO Technologies, which operates in the areas of manufacturing services, products and technologies, engineering and software and systems integration. The engineering services business had a turnover of about Rs 250 crore with an operating profit of between Rs 75 crore and Rs 80 crore.
Founded in 1997 by Ajit Prabhu and Aravind Melligeri, QuEST Global is one of the largest engineering services companies with an estimated revenue of about $250 million (Rs 1,500 crore). The company, which has marquee clients in the world of aviation and automotive including Pratt & Whitney, Rolls Royce, Boeing and Airbus, among others, has about 4,000 employees with half of them located in India. Private equity firm Warburg Pincus, which had invested $75 million in the company holds 25 per cent in QuEST Global.