New Delhi, Sept. 15 -- Tata Technologies Ltd has signed a definitive agreement to acquire ES-Tec GmbH and its subsidiaries for up to €75 million (around Rs 776.3 crore) in an all-cash deal, as the Tata Group's engineering services firm looks to scale up its automotive research and development capabilities in Europe.

The transaction, which will be routed through Tata Technologies' Singapore arm, will give it full ownership of the Wolfsburg-headquartered ES-Tec Group, which posted revenues of €36 million (around Rs 372.6 crore) in 2024. The group employs over 300 people.

The deal consideration includes performance-linked earn-outs and is expected to close by December 2026, subject to regulatory approvals in Germany, Morocco, and other jurisdictions.

Founded in 2006, ES-Tec specializes in high-end automotive engineering services with strong expertise in advanced driver-assistance systems (ADAS), connected driving, and digital engineering.

The acquisition will strengthen Tata Technologies' footprint in Germany, which is home to some of the world's largest automakers, while adding a local talent pool and deep domain know-how in systems engineering.

"The acquisition of ES-Tec Group is a strategic leap that enhances our ability to deliver end-to-end product engineering solutions across the automotive value chain," said Warren Harris, managing director and chief executive officer of Tata Technologies. He added that the deal is expected to be earnings-per-share accretive from the first full year of operations.

Marc Wille, CEO of ES-Tec, said joining forces with Tata Technologies will allow the company to expand capabilities and international presence, while offering customers competitive pricing and faster development cycles.

The move comes as European original equipment manufacturers (OEMs) accelerate R&D spending on ADAS, electrification, and software defined vehicles. The engineering services provider (ESP) market in Europe is projected to expand from €4.5 billion in 2020 to €11.7 billion by 2030, according to estimates quoted in a release by Tata Tech.

Tata Technologies, which had a spectacular listing on the Indian bourses in November 2023, offers product engineering and digital services to manufacturing clients across automotive, aerospace, and industrial heavy machinery sectors.

Published by HT Digital Content Services with permission from VC Circle.