Mindtree to buy US-based Magnet 360 for $50M

Mid-size IT services firm Mindtree Ltd has inked a definitive agreement to acquire Magnet 360, a Salesforce.com platinum consulting partner, for $50 million in cash, in a move aimed at addressing the cloud-based services market, according to a press statement.

The deal amount includes an upfront payment of $37 million and earn out and additional payout of upto $13 million over the next two years.

With the acquisition of Magnet 360, Mindtree will add more than 100 certified Salesforce experts and help clients digitise back-end value chains.

“This acquisition will strengthen our offerings in digitising the value chain and building sense-and-respond systems,” Krishnakumar Natarajan, chief executive officer and managing director of Mindtree, said in the statement.

Founded in 2008, Magnet 360 specialises in multi-clouded solutions providing consulting services and implementation, mainly to media/entertainment, manufacturing and finance industries. It is operational only in the US. 

The company has been a Salesforce partner since 2004. Salesforce, Sales Cloud, Service Cloud, Marketing Cloud and others are trademarks of    Salesforce.com.

Magnet 360 works with companies across Salesforce solutions such as CRM, branded sites and communities, social campaign strategy and management and marketing automation. Salesforce had invested in Magnet 360 along with StarTec Investments and Gage Group.

The company is headquartered in Minneapolis with offices in New York, Los Angeles and Chicago. Its revenue was about $25 million in calendar year 2015.

"Our expertise in Salesforce, combined with Mindtree's strategic relationships with Global 2000 companies, will position us among the leading consulting, implementation and integration partners for Salesforce programmes," said Matt Meents, CEO, Magnet 360.

The transaction, which is expected to be completed by the end of March this year, is however subject to customary closing conditions.

In July last year, the company had agreed to acquire UK-based Bluefin in an all-cash transaction for £42.3 million ($66.13 million), and US-based Relational Solutions, an IT solutions company specialising in technology services to the consumer goods industry, for $10 million in cash.

Meanwhile, Mindtree has elevated Rostow Ravanan as chief executive officer as part of a management reshuffle.

It has also appointed Krishnakumar Natarajan as executive board member and Subroto Bagchi as non-executive ad non-independent board member.

Prior to this appointment, Rostow was heading the enterprise services at Mindtree. He has also been responsible for leading Mindtree’s business in Europe. Before that, he was chief financial officer and led Mindtree’s IPO in February 2007.

Bangalore-based Mindtree counts Nalanda Capital, Global Technology Ventures and V G Siddhartha-led Café Coffee Day Group as its shareholders.

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