Hyderabad-based tech firm Cyient today said it will divest its 49 per cent equity ownership in joint venture firm Infotech Aerospace Services to its partner Pratt & Whitney. The consideration received from the transaction is USD 1.8 million, post additional dividend disbursement of USD 9.1 million from the cash reserves, Cyient said in a BSE filing. “The transaction would be EPS (earnings per share) neutral. The closing of the transaction is subject to regulatory approvals and customary closing conditions,” it added. Shares of Cyient were trading at Rs 519.65 apiece, down 1.19 per cent from previous close on the BSE.
Infotech Aerospace Services Inc (IASI), a 51:49 joint venture between Pratt & Whitney and Cyient, was set up in 2013 in Isabela, Puerto Rico. It provides aerospace defence design, development and related services, primarily to United Technologies and its business units. Pratt & Whitney is a division of United Technologies Corporation. Pratt & Whitney’s aircraft engines are used in civil as well as military aviation. 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.
“…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 2015 as part of our strategy to exit the IT services business,” Cyient CEO and MD Krishna Bodanapu said. This divestment is a step in the right direction and will aid the company in becoming more focussed striding towards achieving this vision, he added. “We will continue to evaluate and rebalance our business portfolio,” Bodanapu said.
Earlier this month, 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 USD 8-9 million and they have 47 employees, Cyient had said. The enterprise value of the deal was USD 5.5 million on a cash-free and debt-free basis, subject to closing adjustments and deferred payment and earn-out based in future performance.