In a strategic move to bolster its semiconductor capabilities, Larsen & Toubro (L&T) has announced the acquisition of a 100% stake in semiconductor design startup SiliConch Systems for INR 183 Cr.
This acquisition will be executed through L&T’s wholly owned subsidiary, L&T Semiconductor Technologies (LTSCT).
According to a regulatory filing with the Bombay Stock Exchange (BSE) dated July 9, 2024, L&T stated that the share purchase agreement was signed on July 8, 2024, with the transaction expected to close by September 15, 2024.
“We wish to inform you that L&T Semiconductor Technologies Limited, a wholly owned subsidiary of the Company, has entered into a Share Purchase Agreement on July 8, 2024, for acquisition of 100% stake in SiliConch Systems Private Limited,” said Sivaram Nair, Company Secretary & Compliance Officer at L&T.
The deal includes an upfront payment of INR 133 Cr, to be made at the closing of the transaction, with an additional INR 50 Cr to be paid over the next four years.
The deferred payment will be subject to customary closing adjustments and the fulfillment of certain targets and conditions.
Founded in 2016, SiliConch Systems is a Bangalore-based fabless semiconductor design company specializing in the development of System-on-Chip (SoC) intellectual property.
The startup, which boasts over 30 granted patents across various geographies, primarily generates revenue from non-recurring engineering (NRE) fees and license fees.
In FY 2023-24, SiliConch reported an operational revenue of INR 27.68 Cr, up from INR 19.97 Cr in the previous year.
The acquisition is set to enhance L&T’s presence in the fabless semiconductor space by integrating SiliConch’s IP, engineering skills, and design expertise.
Additionally, L&T will onboard SiliConch’s 61-member team, further strengthening its talent pool.
“The acquisition is expected to add IP, engineering skillsets, and design expertise to strengthen the Group’s presence in the fabless semiconductor business, aligning with the overall growth strategy of LTSCT,” L&T added in the filing.
This acquisition occurs against a backdrop of increased activity in the Indian semiconductor industry, driven by growing demand for semiconductor chips and government initiatives to boost semiconductor manufacturing.
