Tech Mahindra Ltd said on Monday it has agreed to buy Com Tec Co IT Ltd (CTC), a software solutions and services provider with development centers in Latvia and Belarus, for €310 million (around â‚¹2,620 crore).
The acquisition, which includes earnouts and synergy-linked payouts, will allow Tech Mahindra to expand its offering into cutting-edge digital engineering services for some of the largest insurance, re-insurance and financial services clients in the world, it said.
Tech Mahindra is also investing a total of €20 million for a 25% ownership in the SWFT and Surance platforms, two InsurTech ventures funded by CTC.
SWFT is a software-as-a-service or SaaS-based digital customer engagement platform for digital brokers, price comparison websites, and insurers.
Surance, on the other hand, is a personal cyber insurance solution that helps in vulnerability assessment, cyber protection and cyber insurance coverage.
Tech Mahindra said the acquisition would help scale its European presence, with more than 700 IT professionals in contemporary technologies and processes.
“The insurance industry is currently undergoing a significant transformation, driven by new emerging business models powered by disruptive digital technologies,” said Vivek Agarwal, president of banking, Financial Services, Insurance and Corporate Development at Tech Mahindra. To enable this digital transformation, we are investing in enhancing our capabilities to help insurance companies accelerate their transition to cloud-based platforms and provide end-to-end engineering with a European nearshore presence."
“Becoming part of a global entity like Tech Mahindra will give us immediate access to a global scale and create tremendous growth and development opportunities for our people and our business,” said Avraham Shaked, co-founder of CTC.
This was announced after the market hours. Tech Mahindra stock fell 1% to Rs 1,721.65 on BSE, even as the benchmark Sensex rose 0.14% to 61,308.91.
Indian IT companies have recently embarked on an acquisition process to expand their service offerings and consulting business amid growing demand. The acquisition of CTC, for example, is part of Tech Mahindra's recent efforts to expand its offshore operations. The company has already made some 10 acquisitions in less than 12 months. Early last year, it acquired two companies, London-based Infostar LLC (Lodestone), for $105 million and £9.4 million (about $13 million), respectively.
Last month, the company acquired Allyis India and Green Investments in an all-cash deal worth $125 million. The two companies are affiliated companies of the Allyis Group, which has 600 employees and is based in the United States. That same month, Tech Mahindra said it had acquired Activus Connect, a US-based provider of work-at-home customer experience solutions, for a total of $62 million. The acquisition is expected to enhance Tech Mahindra's capabilities in emerging workplace solutions and enhance its comprehensive suite of customer experiences.
Similarly, HCL Technologies announced the acquisition of a 51% stake in German IT consultancy Gesellschaft fr Banksysteme GmbH (GBS). On January 14, HCL Technologies agreed to acquire Hungary-based data engineering services provider Starschema Ltd for $42.5 million. The move is expected to enhance HCL's capability in data-driven digital architecture and increase its presence in Central and Eastern Europe.
In March 2021, Wipro closed the company's largest ever acquisition of banking and financial services technology consultancy Capco for $1.45 billion. In December, it said it had acquired Edgile LLC for $230 million in cash.
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