San Diego-based telecommunications equipment company Kyocera Corporation (KYO) Tuesday said that Kyocera Wireless Corp. has signed a deal with India-based IT solutions provider MindTree Ltd., pursuant to which MindTree will acquire Kyocera's Indian subsidiary Kyocera Wireless (India) Pvt. Ltd.
As per the deal, MindTree will pay upfront about US$6 million, and further payments linked to revenues in financial years 2010-2011 and 2011-2012. MindTree expects the acquisition will contribute nearly US$9 million in revenues for the period October 2009 to March 2010, with profit after tax expected to be in the range of 13% to 15%.
Bangalore-based Kyocera Wireless (India) Pvt. Ltd. was founded in 2003 and employs nearly 600 people. The company is engaged in wireless product development, software engineering, and product testing, as well as development of custom wireless handsets for Indian service providers.
MindTree said the acquired company will continue to provide engineering services to its parent Kyocera Wireless Corp. and other Kyocera entities on a contract basis after the sale.
Kyocera said the sale follows its acquisition of global mobile handset business of Sanyo Electric Co., Ltd. last year, in which Kyocera gained about 1,700 wireless engineers. Under these circumstances, Kyocera anticipates the sale of its Indian subsidiary further improves cost structure while adding flexibility to its engineering efforts.
Commenting on the acquisition, Janakiraman S, MindTree's president and group-chief executive officer, Product Engineering Services, said, "MindTree has established a global leadership position in technologies such as short-range wireless and multimedia codecs that are integral to wireless communication devices."
Janakiraman added, "With the acquisition of Kyocera Wireless (India) Pvt. Ltd. we will be able to further strengthen our leadership position by offering end-to-end design and technology services to wireless Original Equipment Manufacturers and service providers."
KYO closed Monday's regular trading at $91.78 per share on the NYSE.
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