Overview:
On 06 Jun 2022, Cyient announced that it has signed a definitive agreement to acquire Celfinet, a wireless engineering services provider, for EUR41m ($44m) translating to an EV / Sales multiple of 2.4x based on CY21A financials.
The move enables Cyient to strengthen its wireless engineering practice to support communication service providers while strengthening its presence in Europe.
About Cyient:
Founded in 1991, Cyient is leading consulting-led, industry-centric, global technology solutions company.
It engages with customers across their value chain helping to design, build, operate, and maintain the products and services that make them leaders and respected brands in their industries and markets.
The company leverages the experience of 13,000 associates in 14 countries, combines global delivery with local relationships, invests in the power of ideas, and exploits digital innovation.
About Celfinet:
Founded in 2003, Celfinet is a wireless engineering services provider.
It has successfully built an international business combining outstanding wireless engineering expertise and best in class network management solutions portfolio to improve network quality and wireless customer experience whilst at the same time reducing capital expenditure and operating expenditure.
Headquartered in Lisbon, Portugal it employs 277 personnel.
Transaction rationale:
With this acquisition, Cyient strengthens its wireless engineering practice to support communication service providers and enterprises in deploying their pervasive connectivity networks at scale. This will also enable enterprises to build networks to harness the power of 5G and drive their own digital transformation journey.
The addition will further strengthen Cyient's presence in Europe, where Celfinet has a strong footprint, and help scale Cyient's business across North America and Australia. The reach and performance of ongoing 5G deployment and early steps towards 6G are developing to a point where they provide flawless infrastructure for pervasive and unified connectivity.
The enterprise value of EU41m ($44m) translates to EV / Sales multiple of 2.4x and EV / Adjusted EBIT multiple of 12.0x based on CY21A financials. The transaction is expected to be accretive on EPS and EBIT margin from year 1.
“Celfinet's deep expertise and long-standing customer relationships will further add to our capabilities as we strengthen our technology play in wireless networks for 5G rollouts. In addition, Portugal has a highly skilled engineering workforce, making it a strategic innovation hub for expanding our global delivery footprint.” said Krishna Bodanapu, MD and CEO, Cyient.
The Chesapeake Group was not an advisor in this transaction.