IT company Cyient said it signed an agreement to divest its 49% equity ownership in IASI, its joint venture with Pratt & Whitney, as it exits its IT services business.
The Indian company will get $1.8 mln for the stake from United Technologies Corporation, the buyer, after a dividend disbursement of $9.1 mln from the cash reserves, the company said. It wasn’t clear whether Cyient would get all of the $9.1 mln dividend or 49% of it.
The unit had contributed Rs 11.8 cr to Cyient’s net profit in the last financial year.
IASI provides aerospace defence design, development & related services, primarily to United Technologies and its business units.
Cyient owns 49% of the company, which was established in 2003 at Isabela, Puerto Rico.
The transaction would be EPS neutral, the Mumbai-based company said.
The closing of the transaction is subject to regulatory approvals and customary closing conditions, it added.
Krishna Bodanapu, Chief Executive Officer and Managing Director, Cyient said the move was part of the company’s decision to focus on core operations under its “Design-Build-Maintain” strategy.
“To enable greater focus on the strategy, we have been exiting the non-core businesses,” he said.
This is the second divestment after the sale of Infotech Enterprises IT Services (IEITS) that the company did in October of 2015 as a part of its strategy to exit the IT services business.
“This divestment is a step in the right direction and will aid usin becoming more focused striding towards achieving our vision. We will continue to evaluate and rebalance our business portfolio,” Bodanapu added.
The company was earlier known as Infotech Enterprises Ltd and was established in 1991 in Hyderabad, India.
Infotech Enterprises rebranded as Cyient in 2014.
It had 12,000+ employees across 38 global locations as of March 2014 and was counted among the top 30 outsourcing companies in the world at the time.