Information technology and software services provider Tech Mahindra Ltd has signed a definitive agreement to acquire US-based global network services provider Lightbridge Communications Corporation (LCC) for $240 million, as per a stock market disclosure.
The deal, one of the largest overseas acquisitions in the IT space, is subject to regulatory approvals and is expected to close by March 2015.
"This partnership is another significant step towards the globalisation of Tech Mahindra as we welcome a diverse workforce of over 5,000 network professionals across five continents and more than 50 countries. We expect network services to be a major growth engine for our organisation," said Vineet Nayyar, executive vice-chairman, Tech Mahindra.
Headquartered in McLean, Virginia, LCC is one of the world's largest independent providers of network engineering services to telecom industry. With
an annual revenue of $400 million, the firm has built 350 networks and designed over 350,000 cell sites for more than 400 customers globally.
"Having Tech Mahindra's breadth of services to provide advanced managed network services coupled with its size and scale, will help us increase the performance of our customers' ever-evolving networks," said Kenneth Young, CEO of LCC.
CP Gurnani, MD & CEO, Tech Mahindra, said, "This acquisition is a defining moment for Tech Mahindra and the network services sector. We will now be the largest and most comprehensive provider of technology services to communications service providers. Our 25 years of rich experience in delivering technology solutions to enterprises and communications service providers globally will be significantly strengthened by this acquisition."
EY (formerly Ernst & Young) was Tech Mahindra's diligence partner while Dechert LLP acted as the legal advisor on this deal. Jefferies LLC was the sole financial advisor to LCC and Covington & Burling LLP served as its legal advisor.
For Tech Mahindra, a specialist in digital transformation, consulting and business re-engineering, this would be the third deal since January 1 after it acquired a majority stake in data integration and analytics services provider FixStream Network Inc in May and German chemicals giant BASF’s IT solutions arm which deals with third-party clients in February.
Last year in April, Tech Mahindra acquired Sony Mobile Communication's Type Approval Lab.
This is believed to be its biggest acquisition since it snapped Satyam and later merged it with itself.
Shares of Tech Mahindra closed at Rs 2,704.20 each, up 2.97 per cent on BSE in a strong Mumbai market on Thursday.
(Edited by Joby Puthuparampil Johnson)