TVS Electronics board approves merger with TVS eTechnology

Chennai: In a reverse merger, India's largest computer peripheral manufacturer and a listed company TVS Electronics (turnover: Rs 210 crore) has decided to merge itself with group company TVS eTechnology (turnover: Rs 10 crore).

The share-swap ratio is fixed at 1:1. However, the value assigned to each company by the valuer, Deloitte, Haskins & Sells, a chartered accountancy firm, is kept under wraps. The appointed date of merger is fixed at 9 December 2002 subject to the approval of the Madras High Court. The merged entity will be called TVS Electronics and there will be no impact on the share listing.

TVS eTechnology operates in the customer and technology support and maintenance services domain. It also has an agreement with Verifone, USA, to distribute in India point-of-sale terminals.

TVS Investments, a wholly owned subsidiary of Sundaram Clayton, holds 69.5 per cent of the TVS eTechnology equity (Rs 64.75 lakh). TVS Investments is also the holding company for TVS Electronics. The total asset base of TVS eTechnology is Rs 12.52 crore. The merger is part of the business restructuring activities being carried out by TVS Electronics. The company has identified business process outsourcing (BPO) in the field of technology maintenance what with more and more foreign brands with lifetime warranty entering the Indian market.

Already TVS Electronics is into contract manufacturing of computer peripherals. The company's product lines include dot-matrix printers, TVS Proton, uninterrupted power supply systems, input devices, language solutions, supplies and retail automation systems (TVS Sprint).

Says TVS Electronics director Gopal Srinivasan: “The synergies derived from this merger provide scope for economies of scale and reduction in operating and administrative costs.