New Delhi, June 1 -- Hyderabad-based engineering research and development (ER&D) firm Cyient Ltd has signed an agreement to acquire Santa Clara, California-headquartered Tao Digital Solutions.
The Mumbai-listed company will buy 100% of the equity shares of the digital engineering firm and all its subsidiaries in a cash transaction for $218 million (around Rs 2,066 crore), a statement issued by Cyient said. The transaction has valued Tao at about 9.5x of its expected operating profit in the current calendar year.
The deal is expected to help Cyient expand its presence in the automotive, healthtech and hi-tech sectors, and also grow its footprint in North America. The acquisition mainly adds two capabilities: one of AI and data engineering, which enables enterprise-grade AI adoption and genAI deployment; and the other of digital and product engineering.
"This acquisition marks a transformative moment for Cyient, elevating us into a select group of partners who can credibly deliver AI-native engineering at a global scale," said Sukamal Banerjee, executive director and chief executive officer of Cyient.
The deal, expected to be completed by the end of next quarter, comes only a few months after the firm agreed to buy a majority stake in semiconductor manufacturer Kinetic Technologies for $85 million. In 2022, Cyient was aggressive with its inorganic growth strategy when it acquired Grit Consulting, Citec, and Celfinet in the same year.
Founded in 2022, Tao Digital offers technology and AI-driven services and solutions to businesses, and has a presence in the United States, Canada, India, Taiwan and Europe.
"Cyient's global reach, the strength of its customer portfolio, and its decades of technical excellence provide the ideal platform to amplify what Tao Digital does best," said Rajkumar Velagapudi, founder and chief executive, Tao Digital.
Published by HT Digital Content Services with permission from VC Circle.