Geometric Software Solutions and the global engineering services division of the Detroit-based Modern Engineering on Wednesday announced a merger agreement to form a global engineering solutions provider.
The transaction is valued at approximately $32 million, including a working capital loan of approximately $7million.
The net equity value of $25 million is funded by Geometric's contribution of $23.75 million representing 95 per cent stake in the company and $1.25 million investment by Modern's executive management for a 5 per cent stake.
Geometric's contribution is funded by approximately $10 million raised through preferential placement of equity with ICICI Venture and the balance through borrowings and internal accruals.
The engineering services business of Modern Engineering has a current annual revenue of approximately $40 million. Ron Wood, president and CEO of Modern Engineering, said, "The scale of engineering domain knowledge, breadth of services and worldwide operational engineering services delivery centres are truly unique in our industry. The combined expertise of our people, processes and technology is second to none."
Ravi Gopinath, MD and CEO of Geometric Software Solutions, said, "Modern's track record in engineering and manufacturing solutions, coupled with Geometric's presence in the development of cutting-edge collaborative PLM solutions, will offer our customers an unbeatable advantage in globalising their engineering processes."
"We are excited to be one of the few companies offering the global manufacturing sector this significant value proposition."
The combined company will emerge with a much larger operating base. Now, in addition to offices in India, Germany, France, Singapore, Japan, China and Romania, the company will also have eight offices in North America, showing a substantial global presence for the engineering industry.
