Mahindra Engineering Services to merge with Tech Mahindra
Software services major Tech Mahindra on Friday said it will merge Mahindra Engineering Services (MES) with itself. The move is aimed at tapping global opportunities in aerospace and automotive verticals. The Boards of Directors of the two companies have approved a proposal to merge MES with Tech Mahindra, the IT major said in a statement.
MES caters to automotive, aerospace, defence and manufacturing industries. The company has over 1,300 employees and reported revenues of Rs. 250.59 crore in fiscal year 2012-13. The merger, subject to necessary regulatory approvals, will expand MES' global reach and provide access to deeper resource pool. Tech Mahindra will gain access to some of the key automotive clients across the globe. The merger process could take about 8-9 months, the statement said.
"MES and Tech Mahindra's Integrated Engineering Services (IES) merger strengthens the existing services portfolio, enhances presence in US and Germany, provides scale and brings in new clients for further expansion," Tech Mahindra Global Head - Integrated Engineering Services - Karthikeyan Natarajan said. The exchange ratio approved by both the boards has been fixed at 5 shares of Tech Mahindra (face value of Rs. 10 each), for every 12 shares of MES (face value of Rs. 10 each). Tech Mahindra will issue 42.6 lakh new shares, thereby increasing its outstanding shares to 23.73 crore.
"Our joint go-to-market strategy will help us capture newer markets and enhance our service portfolio especially in aerospace and embedded services segments while bringing value to all our stakeholders," MES CEO Prashant Kamat said. Tech Mahindra shares traded 0.5 per cent higher at Rs. 1,700 on the BSE as of 11.20 a.m. as against a 0.82 per cent rise in the broader BSE IT benchmark. Khaitan & Co acted as the legal advisor for the transaction.