"3Cap is valued at 11 million euros, of which 7.5 million euros will be paid up front. Geometric is funding the acquisition out of accrued cash," Geometric said in a filing to the BSE.
The balance payments will be subject to earn-out under mutually agreed terms and conditions over a maximum period of three years, it added.
"This acquisition represents an important step in our strategy to provide greater capability and more comprehensive solutions in the digital product realisation space to our customers," Geometric MD and CEO Manu Parpia said.
Geometric has strength in engineering software and mechanical engineering services, with almost 70 per cent of its revenues coming from the US market.
"This acquisition fills a major gap in the solutions we offer to our customers, while at the same time strengthening our presence in Europe," he added.
Based in Oberschleiheim, Germany, 3Cap Technologies specialises in electronics engineering, primarily for the automotive industry.
Founded in 2004, it employs over 110 people and offers services ranging from embedded systems development verification and calibration in the areas of powertrain and chassis.
In calendar year 2012, 3Cap had revenues close to 11 million euros and the acquisition is effective January 1, 2013, it said.
Geometric recorded consolidated revenues of Rs 808 crore for the year ended March 2012. It employs over 4,500 people across 12 global delivery locations in the US, France, Romania, India, and China.