Indian auto tech firm KPIT Technologies acquires four Technica group cos for €80mn

KPIT Technologies, a Pune-based automotive technologies and services firm, has announced the acquisition of four entities of Technica Group in Europe and US, for an initial value of €80 million (₹633.2 crore). Announced earlier today, the move will see KPIT undertake 100% acquisitions of Technica Engineering in Germany and Spain, and Technica Electronics in Barcelona and US.

The deal will be closed by the end of October, following which the Technica Group companies will be wholly owned by KPIT Technologies.

In a regulatory filing announcing the acquisition with the Bombay Stock Exchange (BSE), KPIT said that the Technica Group engages in automotive engineering, building tools for validation of automotive technologies, automotive ethernet products, and also specialises in system prototyping of production ready automotive components.

“The acquisition will create across-the-stack expertise, offering a one-stop shop for the industry to transform towards software driven vehicles (SDVs),” the regulatory filing specified.

Software driven vehicles refer to new generation automotives that use software for operational purposes, including managing advanced mobility tasks such as road mapping, traffic management, cross-vehicle communication, smart mobility in smart cities, and more.

KPIT Technologies is a software integration services firm that works with automotive manufacturers, as well as tier 1 suppliers, to develop and supply software platforms that can enable technologies such as advanced driver assistance systems (ADAS) infrastructure.

The company has clients such as BMW, Honda, Hitachi and Lafarge, among others.

It claims to have one of the biggest, non-conglomerate engineering team of over 2,000 members across India, US, Germany, Japan and Korea, among other nations. It also has over 25 manufacturer and supplier partners, and 56 active production projects at the moment.  

KPIT, which was formed in 2019 and listed after a complex merger process with Birlasoft, is one of many SDV services developers, along with global firms such as BlackBerry’s QNX platform, Bosch Mobility Solutions, and others. They are part of an increasing industry of SDVs, which major car makers, such as the Volkswagen Group, said will define auto conglomerates in future.

A February 2021 report from consultancy firm Deloitte said that the software cost accounted for 10% of a car’s bill of materials (BoM) cost in 2021, which can rise to as much as 50% by 2030 — which is the industry that KPIT is targeting.