Tech Mahindra Ltd has agreed to acquire US-based Zen3 Infosolutions (America) Inc. and its Indian unit for up to $64 million (Rs 460 crore) in cash.
The Indian software services company said in a stock-exchange filing that it will pay $42 million at the time of closing the deal and another $22 million over three years linked to the American company’s financial performance.
The acquisition will enable Tech Mahindra to boost its enterprise application practice and capabilities, it added.
Zen3, which was founded in 2013, has capabilities in Al enablement services, AI speech solutions, cloud engineering, software product engineering, and DevOps.
It has more than 1,300 employees spread across its headquarters in Seattle and offices in Dublin, Hyderabad, Vishakhapatnam, and Bengaluru.
The US company had recorded revenue of $38 million in the financial year ended 31 December 2018 as compared with $28.4 million in the previous year. It had clocked revenue of $25 million in the six months ended 30 June 2019.
The transaction is expected to be completed by 1 April this year.
Tech Mahindra’s acquisitions
The Indian software services company has been making acquisitions. In its 2018 annual report, the IT firm had said that it was aggressively setting up and buying platforms.
In November last year, Tech Mahindra had agreed to acquire Born Group Pte. Ltd and its Indian unit as part of efforts to enhance its consulting capabilities.
In July 2019, Tech Mahindra had agreed to acquire a majority stake in US design consultancy Mad*Pow Media Solutions LLC.
In June, the Indian software services company said it is acquiring Canada-headquartered IT consultancy Objectwise Consulting Group Inc.
In April, the IT firm said it will acquire 18.1% stake each in Infotek Software & Systems Pvt. Ltd and Vitaran Electronics Pvt. Ltd for a total of up to Rs 13 crore.
Sourced from VCCircle - written by Joseph Rai