BackArrow Electronics to buy Gujarat-based eInfochips
Deal size of eInfochips Ltd's acquisition by Arrow Electronics is likely to bearound $300-325 million and the transaction likely to close this month
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Ahmedabad: New York Stock Exchange-listed Arrow Electronics Inc. has agreed to acquire Ahmedabad-based product engineering company eInfochips Ltd, the two companies said on Tuesday, without disclosing the size of the transaction.
The deal size is likely to be in the range of $300-325 million, an investment banker familiar with the development said on condition of anonymity.
The transaction is expected to close this month, eInfochips said in a statement.
“This deal is very important for India and the IT sector as it comes at a time when the industry is going through turbulent times," said Pratul Shroff, chief executive of eInfochips.
“Unlike other services companies, we pioneered end-to-end product design, including hardware, software and industrial design. This acquisition is also a testament to our engineering execution, expertise in connected devices and connecting them to the cloud, and the trust that our clients place in us"
Shroff declined to comment on the size of the deal.
Avendus Capital advised eInfochips on the transaction. Ahmedabad-based GVFL Ltd (formerly known as Gujarat Venture Finance Ltd) holds close to 5% in eInfochips.
With annual revenue of about Rs500 crore and profit of over Rs100 crore, eInfochips has over 1,700 employees worldwide.
On its successful completion, the acquisition will give Arrow access to eInfochips’ 1,500 Internet of Things (IoT) solution architects and software development resources.
“Upon close of this acquisition, eInfochips advances our IoT strategy, expands our offerings, and moves us into the rapidly growing IoT services market. As a result, we will deliver complex and connected IoT solutions and technologies across multiple cloud platforms," Michael J. Long, chairman and chief executive officer of Arrow, said in a statement.
Arrow Electronics is a global provider of products, services and solutions to industrial and commercial users of electronic components and enterprise computing solutions.
Shroff, an alumnus of BITS Pilani and the Indian Institute of Management, Ahmedabad, founded eInfochips in 1994.
The company works in the areas of product engineering, device life cycle management, IoT and cloud computing frameworks, intelligent automation and video management.
Today, 60% of its revenue comes from Fortune 500 companies and 80% from solutions around connected devices.
Before founding eInfochips, Shroff had worked for Intel Corp. and Daisy Systems Corp. in the US.
At Intel, he was a part of the 80186 processor design team, and was one of the founding engineers at Daisy Systems.
Shroff said that eInfochips was among the first companies in Gujarat to offer employee stock options to its workforce.
“My experience at Silicon Valley taught me that I should create enough value for my workforce. As a result, about Rs360 crore will be distributed to 571 employees and ex-employees for the ESOPs they hold in the company," according to Shroff.
Shroff, who is also a trustee at Calorx Foundation that works in the education sector in Gujarat, said his company had created an ecosystem that has moulded more than 5,000 engineers so far and contributed in creating as many as 17 start-ups that have been founded by ex-employees of eInfochips.
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