Blackstone backed Mphasis to buy US-based Blink for $94 mn

By Beena Parmar

  • 23 Sep 2021
Credit: Thinkstock

Mphasis Ltd, an Indian software services company backed by global private equity major The Blackstone Group, has announced the acquisition of US-based Blink Interactive Inc for a total consideration of $94 million (around Rs 694.3 crore). 

"The acquisition closed on September 21, 2021 (PST) consequent to signing of the definitive agreement in nature of agreement for Plan of Merger between Mphasis Corporation, a wholly-owned subsidiary of the company; a subsidiary of Mphasis Corporation; and Blink Interactive Inc," Mphasis said in a regulatory filing. 

The acquisition is expected to provide access marquee logos, strengthen experience business and its leadership as well as the revenue growth accretive, it said adding that the total consideration of up to $94 million includes earnouts. 

The announcement pushed Mphasis stock up to hit a new high of Rs 3,392.35 apiece on BSE and Rs 3,324 per share on the National Stock Exchange. 

Founded in 2000, Seattle-headquartered Blink is a User Experience research, strategy, and design firm that provides design consultancy enterprises to create transformative digital products, brands and experiences for marquee brands. 

With over 130 employees, Blink has additional studios in Austin, Boston, San Diego and San Francisco. 

Mphasis CEO and executive director Nitin Rakesh said the acquisition of Blink, consistent with our M&A focus, is in the forefront of providing well researched design and high impact digital experiences to our clients and their end customers. 

“The total addressable market for the upstream user research, strategy and design is growing 25-30% p.a. i.e., 4-5x the overall IT (information technology) services market,” he said.

According to him, there is significantly increased focus on customer/ user centered design in the current environment.

“The synergy opportunity set will revolve around product, experience and service design, as well as the end-to-end implementation services across the spectrum of clients & industries we service together,” Rakesh added. 

“Understanding user behaviour, through qualitative research is the foundation of our product strategy and experience design work. Knowing what motivates a product’s customers, including their context of use, mental model, needs and opportunities, allows us to design experiences that are intuitive, innovative, useful, and usable...We are so thrilled to now have Mphasis’ engineering skills as part of our core, providing end-to-end services for our clients and following our designs through to launch,” Blink CEO, Karen Clark Cole, said.  

US private equity giant The Blackstone Group is an investor and a client of Mphasis, which provides cloud and digital services to companies predominantly in banking, financial services, insurance sectors. 

In April this year, funds owned by Abu Dhabi Investment Authority (ADIA), UC Investments (office of the chief investment officer of The Regents, University of California) and others agreed to co-invest along with Blackstone to acquire as much as 75% stake in Mphasis. 

Blackstone recently rolled over its investments in Mphasis Ltd to a new fund after dropping its attempt to sell the Indian IT outsourcing service provider earlier this year. 

It was reported earlier in the year that Carlyle had made a sole bid to buy out Blackstone’s stake in the company, but the deal did not go through because of a valuation mismatch. 

Blackstone had also wanted a more competitive process.

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