Infotech Enterprises America Inc, the wholly-owned subsidiary of Infotech Enterprises Ltd (IEL), has entered into a definitive agreement with Time To Market Inc (TTM) to acquire the company and all its affiliates for an undisclosed sum. With this acquisition, the company will be adding about $4-5 million to its revenue besides a head count of 130 people. TTM Inc is an ASIC design and embedded software services company based in San Jose, California, and has completed application-specific integrated circuit (ASIC) projects for leading electronics companies in the consumer, networking, and communications markets.
IEL has established itself strongly in many verticals, especially aerospace and rail as part of its activities in the engineering services. In order to establish a strong presence in hi-tech design services (semiconductor, consumer, computing, telecom, medical and industrial automation), IEL zeroed in on TTM to launch its foray into the hi-tech industry.
TTM is focused on the niche area of backend physical design within ASIC design for several semiconductor manufacturers. Over the last two years, TTM has successfully expanded its services to include front-end designs. The ASIC design strengths of TTM complement the existing strengths of IEL in Field-Programmable Gate Arrays (FPGA) and board design and embedded software development.
The combined entity hopes to provide end-to-end design services to semiconductor, telecom and computing industries, Ashok Reddy, president, global human resource & corporate affairs, said. However, the cost of the acquisition was not disclosed but sources in the know expect it to be about $7.5-8 million. The company is still on the look out for acquisitions to address the whole spectrum of the hi-tech industry and automotive engineering.
The vertical will focus on the US markets and leverage its recent entry into Japan in the near term. Besides, Infotech will start addressing the European hi-tech markets in the next financial year. The new vertical will provide complete range of design and verification services to the hi-tech markets, he added.
On the trends for increasing its activities in the hi-tech services, Reddy pointed that there is a huge opportunity for designing chips besides servicing the chip makers. According to a NASSCOM- Booz and Hamilton report on design engineering services, global engineering spend on hi-tech design services stood at $170 billion in 2004 and is estimated to reach $300 billion by 2020. The report projects the hi-tech domain to be the fastest growing segment of opportunity. Hi-tech is also estimated to have the largest engineering spend and is the most open to global engineering processes. The potential in hi-tech industry for offshoring is estimated in excess of $15 billion by 2020.