Software services firm Tech Mahindra Ltd has agreed to purchase the UK-based digital services provider BIO Agency Ltd for up to £45 million ($66 million or Rs 447 crore) including debt, in its second acquisition in as many months.

The all-cash deal has been struck at an enterprise value of £40 million and includes payment of up to £5 million in surplus cash, the Indian company said in a stock-exchange filing.

The transaction is likely to close by the first week of July, the Mumbai-based company said.

The deal comes barely a month after Tech Mahindra agreed to acquire the UK-based fintech firm Target Group in an all-cash deal valued up to £120 million including debt to boost its offerings in the banking and financial services segment.

BIO Agency specialises in digital transformation and innovation and helps clients engage with their customers more effectively. It works with companies across financial services, retail, property, travel and technology sectors.

"The acquisition brings forth a synergy that will open up more clients for BIO globally (especially in Europe and the US), scaling their offering geographically and enabling new services and deeper Digital Change," Tech Mahindra said.

Tech Mahindra said it will pay £22 million and the surplus cash upfront, and the balance as deferred payments between 2016-17 and 2018-19 based on the performance of BIO Agency.

Incorporated in April 2006, BIO had revenue of £12.5 million for 2015-16, up from £7.3 million in 2014-15 and £6.3 million in 2013-14.

Other overseas targets

Tech Mahindra, part of the diversified Mahindra Group, joins bigger rivals Wipro Ltd and Infosys Ltd in acquiring overseas companies this year to strengthen their offerings.

Wipro, India’s No. 3 software services exporter after Infosys and Tata Consultancy Services, agreed in February to purchase US-based HealthPlan Services for $460 million in its second-biggest acquisition ever.

Also in February, Infosys struck its second-biggest M&A ever as it signed a deal to buy US-based automation technology firm Panaya Inc at an enterprise value of $200 million.

Tech Mahindra itself is not new to acquisitions. It took over the fraud-hit Satyam Computer Services in 2009 and has struck deals in recent years. In November 2014, Tech Mahindra signed a pact to acquire US-based global network services provider Lightbridge Communications Corporation for $240 million.

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