In a move that will help the company expand its presence in core banking and wealth management sectors, Tech Mahindra has signed an agreement to acquire Geneva-based Sofgen Holdings (Sofgen) for under $30 million (about ₹187 crore).
“The acquisition amount is sub-$30 million. Together, we will address a lot of white spaces in core banking and wealth management sectors,” Ravi Vasantraj, Global Head, (Banking, Financial Services and Insurance), told BusinessLine .
Founded in 1999, Sofgen is an IT consulting group specialising in private, commercial and retail banking.
The company provides core banking from its offices in Chennai, Geneva, Singapore and London.
About two-third of the total acquisition amount will be paid upfront and the remaining one-third is based on certain milestones that include topline performance.
The company, which employs about 450 personnel, has posted $45 million in revenues, Vasantraj said.
The transaction, subject to regulatory approvals, is expected to close by March. Avendus Capital was the adviser to Sofgen.
“This acquisition gives us an opportunity to enhance our expertise to implement modernised core banking and transformation services capabilities…,” Tech Mahindra Managing Director and Chief Executive Officer CP Gurnani said, adding this will help in establishing Tech Mahindra as a “significant” player in the global private banking and wealth management segment.
Acquisition spreeFor Tech Mahindra, this is the first acquisition in the BFSI space in the last four years.
The company, however, had been on an acquisition spree in 2014, with the company buying out three companies.
In November, India’s fifth largest IT exporter acquired US-based global telecom network services provider Lightbridge Communications Corp (LCC) for $240 million. E
arlier in April, it acquired 75 per cent stake in US-based big data start-up FixStream Networks for $10 million, and prior to that in February, it acquired IT services arm of Germany’s BASF Business Services Holding GmbH for an undisclosed sum.
“On the BFSI sector, we will acquire companies only if they are strategic fit to our strategies,” Vasantraj added.
On Friday, Tech Mahindra shares closed up 4.41 per cent at ₹2,680.10 on theBSE.