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Warburg takes significant position in Tata Technologies
Posted on Friday, 16 June 2017 10:22
Warburg Pincus is acquiring a 43.0 per cent stake in Tata Technologies for USD 360.00 million, representing the largest private equity investment for a minority stake in an Indian company announced so far this year.

The global private equity juggernaut is buying 30.0 per cent of the engineering consulting organisation, which has a core specialisation in automotive and aerospace, from Tata Motors and its subsidiary Sheba Properties.

It is also taking over the 13.0 per cent held by Tata Capital through its Alpha TC Holdings and 4 Tata Capital Growth Fund I, though the deal is still subject to regulatory approvals.

Tata Technologies provides engineering, design and product lifecycle management services to global blue-chip automotive, aerospace and industrial machinery manufacturers.

Originally established in 1989 as a unit of Tata Motors, the group now has over 8,500 employees in 23 countries and maintains regional headquarters in the US, India and the UK, and an international one in Singapore.

Alpha TC Holdings and Tata Capital came on board in 2011 after providing private equity funding of USD 30.00 million.

Tata Technologies is currently pursuing a European growth strategy that has led to a USD 26.00 million investment in establishing a new innovation and development centre in the UK and the purchase of Sweden’s Escenda Engineering last month.

In the financial year ended 31st March 2016, the Pune-registered business said revenues were up at INR 27.14 billion (USD 420.93 million) from INR 26.44 billion in FY 2014-15.

Net profit rose to INR 3.82 billion from INR 3.34 billion year-on-year, and the group said it expects improved growth in revenue, earnings before interest, tax, depreciation and amortisation and net profit in the coming years.

The Financial Times noted the investment gives Tata Technologies a valuation of USD 837.00 million, and it should help Tata Motors’ trim its debt pile.

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