KPIT to buy engineering solutions arm of US-based Caresoft

Automotive and mobility focused tech firm KPIT Technologies said Tuesday it has inked a deal to acquire the engineering solutions division of US-based Caresoft Global for $191 million (₹1,614 crore).

The acquisition will involve full ownership of four units: Caresoft Global Technologies, Inc. (USA), Caresoft Engineering Services Limited (UK), CAREGLOTECH de RL de CV (Mexico), and OXI SRL (Italy).

Caresoft Global is into automotive benchmarking and cost reduction oriented engineering solutions. As part of the deal, it will restructure the business into benchmarking and engineering solutions units with KPIT acquiring the carved-out Caresoft Engineering solutions business globally that is primarily focused off-highway, truck and bus segments and manufacturing Solutions.

KPIT will also partner with Caresoft in its benchmarking business.

Led by former Case New Holland (CNHi) executive, Mathew Vachaparampil, Caresoft Global generated revenues of $51 million in 2024, a tad higher than $50 million the previous year and $44.3 million in 2022, from its engineering solutions business.

The proposed deal values the asset at close to 4x its revenues.

Total consideration for acquisition $191 million includes $25 million variable consideration based on certain milestones to be paid in one or more tranches over a period of four years.

Avendus Capital was the advisor to KPIT on this transaction.

KPIT said the deal is operating margin accretive.

The Pune-based firm has been growing organically and via acquisitions with a CAGR of 28.2% in the last three years. All previous acquisitions have been EPS accretive and KPIT has funded those with internal accruals and the bulk of the proposed deal will be funded via the same mode.

In line with KPIT’s strategic focus on commercial vehicle segment, this partnership will boost its relationships and domain knowledge in trucks and off-highway segments; accelerate its foray into China; ramp up value creation through full vehicle cost reduction solutions for passenger car, trucks and off highway segments; and provide manufacturing engineering solutions for mobility segment.

“OEMs today are looking for partners who can seamlessly integrate software, hardware, and manufacturing functions. With Caresoft’s strong domain expertise, this acquisition enhances our ability to deliver value to our clients while accelerating our entry into the Chinese market,” said Kishor Patil, CEO & Managing Director, KPIT.

Last month, KPIT Technologies reported a consolidated net profit of ₹244.7 crore for the quarter ended March 2025, marking a 48.9% increase compared to ₹164.3 crore in the same period last year. Revenue for the March quarter stood at ₹1,528.3 crore, reflecting a year-on-year growth of 15.9% over the corresponding quarter of the previous year.

Shares of KPIT Technologies have corrected by a third from its high last July. The price has bounced back around 18% in the past one month, outpacing a 10% rise in the broader benchmark indices in the same period.

The negative sentiments around the impact of tariffs on the global economy and automobiles in particular had led to a sharper correction in its stock previously.