Cyient has signed an agreement to sell its 49 percent stake in Infotech Aerospace Services, Inc. to Pratt & Whitney, a division of United Technologies Corporation.
Cyient Limited ("Cyient") a global provider of engineering, manufacturing, geospatial, network and operations management services to global industry leaders, has signed a definitive agreement to divest its 49% equity ownership in IASI. Established in 2003, Isabela, Puerto Rico, IASI is a 51:49 Joint Venture between Pratt & Whitney and Cyient. IASI provides aerospace defence design, development & related services, primarily to United Technologies and its business units.
Pratt & Whitney is an American aerospace manufacturer with global service operations. It is a subsidiary of United Technologies(UTC) and has revenues of $14 billion.
Cyient (formerly known as Infotech Enterprises) was founded by eminent entrepreneur, Padma Shri recipient and former Nasscom chief, BVR Mohan Reddy.
The transaction would be EPS neutral. The closing of the transaction is subject to regulatory approvals and customary closing conditions.
PTI reports, “The consideration received from the transaction is $1.8 million, post additional dividend disbursement of $9.1 million from the cash reserves, Cyient said in a BSE filing.
Shares of Cyient were trading at Rs 519.65 apiece, down 1.19 per cent from previous close on the BSE.
IASI contributed to Rs 11.8 crore to Cyient's profit after tax in FY2017, the filing said. Its total net profit was Rs 236.90 crore in the said fiscal.”
Krishna Bodanapu, chief executive officer and managing director, Cyient Ltd. said, "We continue to embark on the journey towards realization of our "Design-Build-Maintain" Strategy. To enable greater focus on the strategy, we have been exiting the non-core businesses. This is the second divestment post the sale of Infotech Enterprises IT Services (IEITS) that we did in October of 2015 as a part of our strategy to exit the IT services business. This divestment is a step in the right direction and will aid us in becoming more focused striding towards achieving our vision. We will continue to evaluate and rebalance our business portfolio."
PTI further reported, “Cyient had announced that its step down subsidiary, Cyient Defense Services Inc, US has signed a definitive agreement to acquire 100 per cent equity in B&F Design Inc (based in Connecticut, US) in an all-cash deal.
The transaction is aimed at further strengthening automation in Cyient's key vertical -- aerospace and defence -- in line with strategy for growth.
B&F Design's revenues are between $8-9 million and they have 47 employee."