Mumbai: Printer-manufacturer TVS Electronics has sold off its contract manufacturing services business at Tumkur for Rs41.12 crore to Incap Contract Manufacturing Services, a 100% subsidiary of Finland based Incap Corporation.
TVS Electronics, a leading contract manufacturing service provider in the country, through it CMS business served global original equipment manufacturers by making box assemblies as well as PCB assemblies in its QS 9000-certified facility at Tumkur (near Bangalore).
“TVS Electronics today (31 May 2007) executed the business transfer agreement for transfer of the contract manufacturing services business at Tumkur (CMS business) for a consideration of Rs41.12 crore with Incap Contract Manufacturing Services Pvt. Ltd, a wholly-owned subsidiary of Incap Corporation, Finland,” the company said in a communique to the Bombay Stock Exchange.
Under the agreement, TVS Electronics’ Tumkur unit and related design services in Bangalore will be transferred to Incap’s subsidiary Incap Contract Manufacturing Services on 1 June.
“The business operations acquired by Incap include the manufacturing services business as well as the property and the factory building with its equipment in Tumkur,” Incap Corporation said in a statement to the Helsinki Stock Exchange.
The Tumkur plant is spread over a floor space 6,000sq ft and operates with the help of 230 personnel, making box assemblies like UPS, inverters, rectifiers, pay phones, keyboards and hand-helds.
Incap forecasts that its Indian operations will generate about Euro8-10 million (over Rs45-55 crore) in revenue during June-December 2007.
“In order to attract new customers, investments will be made in further modernising production capacity. Our service ability will improve because we can now offer our global customers more competitive services,” said Juhani Hanninen, president and CEO, Incap Corporation.
Acquiring a business is a suitable and quick way for us to establish operations in Asian markets as now we have a stable customer base and well-functioning production operations in place, Hanninen said.
“This acquisition is in line with Incap’s strategy, which is geared toward growth and internationalisation. Presence in the growing markets of India and Asia will create new business potential. The proximity of procurement sources in Asia will enable more global and more effective purchasing of materials,” Hanninen added.
Shares of TVS Electronics went up 20% and were locked in the upper circuit of Rs50.20 on the BSE while those of Incap Corp. were up 5.38% at Euro2.35 on the Helsinki Stock Exchange.