Syrma Technology and SGS Tekniks merge to create Rs 10 bn electronics firm
The merged entity - named Syrma SGS Technologies Pvt Ltd - will become one of the leading companies in electronic manufacturing services (EMS) field having eight manufacturing facilities in India.
Syrma Technology and SGS Tekniks
- two of the leading companies that provide electronic design and manufacturing services
(EDMS) to global & domestic OEMs - have signed an agreement for cash-cum-stock merger to create a new entity - named Syrma SGS Technologies Pvt Ltd - having a combined turnover of over Rs 10 billion, with 55 per cent revenues coming from exports primarily to the US and Europe. The deal was supported through a Private Equity investment by GEF.
Upon completion of this merger, Syrma SGS Technologies Pvt Ltd will have 8 manufacturing facilities in India across Gurgaon, Manesar, Bawal, Baddi, Bangalore, Chennai, Bargur, and 3 design centre centres in Chennai, Gurgaon, and Stuttgart (Germany).
Consequently, this strategic merger is a perfect fit as there are no overlapping customers, industry verticals and geographies between the two entities. Further, with the established track record and strong expertise of the combined entity will serve marquee customers in industrial, water purification, medical and automotive industries. With their expertise in IoT (Internet of Things), there is huge opportunity to add IoT to a wide range of products making them “smart”. With the projected global growth of IoT products to well over $ 5 trillion and the Indian IoT market keeping pace, the opportunities are quite exciting for the combined entity.
Sandeep Tandon, Managing Director, Syrma Technology Pvt Ltd, commented, “Application areas such as medical electronics and defence electronics are seeing a surge leading to growth in the overall electronics sector. With Government recently announcing incentive schemes like Production Linked Incentive (PLI)
, Specs, EMC 2.0, etc, for developing the ecosystem, there is a bigger need for technological advancement in the EMS (electronic manufacturing services) sector. This merger brings in a combined strength in new product and new customer acquisition through co-creation, product realisation and lifecycle management. I am excited about the future prospect of the combined entity and believe that the merger with SGS Tekniks can help us grow to our business by over 20 per cent Year-on-Year (YoY).”
Recent government policy initiatives like Aatmanirbhar Bharat and Make in India have generated unprecedented interest in the electronic manufacturing sector in India. With Indian EMS market, growing at a CAGR of over 25 per cent, there is an increase in opportunity to outsource manufacturing in consumer electronics, home appliance, mobile phones, etc. To take advantage of such emerging opportunities, the existing management of the two companies will continue to play key roles in driving the future growth of the company. Leveraging the opportunities this merger is poised to expand product and services offerings such as design services, board and box build capabilities that can serve new product and engineering change initiatives.
“We are delighted to bringing together these two iconic companies through this merger and creating a strong platform for both domestic and international growth. We have the utmost respect for Syrma business and its employees, and greatly look forward to working together as we integrate the two companies,” said J S Gujral, Founder and Chairman, SGS Tekniks.
Syrma Technology provides global OEMs with electronic manufacturing services (EMS), backed by strong engineering expertise, to reduce risk and costs on product designs and manufacturing. From RFID technology and power electronics to turnkey manufacturing services and custom magnetics, Syrma delivers high-mix, flexible volume products of IoT products for the automotive, computing, industrial, medical, power, and telecom companies. Within the last decade, it has helped to design, manufacture, and market more than 400 million products worldwide. Syrma is a wholly owned subsidiary of the Tandon Group, a technology-holding group that has grown multiple technology companies since 1978.
Headquartered in Gurgaon (Haryana), SGS Tekniks is an EMS company. Established in 1990, the company was founded by four technocrats and has been serving various sectors for over last three decades. The company services include PCB assemblies, box-build services and electronics design services. The company has four manufacturing locations in India (Gurgaon, Manesar, Baddi and Bangalore) along with design & development center at Stuttgart (Germany) and Gurgaon. Exports to OEMs in Europe contribute about 33 per cent of the revenues and in the domestic market, primary focus is on serving customers in the automotive, water purification, energy metering lighting, railways, defence, computing and industrial verticals.