Vineet Nayyar-led IT services provider Tech Mahindra Ltd has acquired 100 per cent stake in Hutchison Global Services Pvt Ltd (HGS) for $87.1 million, in an all-cash transaction, the company has informed the stock exchanges on Tuesday.
“The acquisition will provide significant enhancement of Tech Mahindra’s expertise in the customer management space and will thus be a key component of its strategic plans going forward. In addition, the acquisition will enable Tech Mahindra to leverage the acquired capabilities and scale for expanding the scope of its existing services to other parts of the Hutchison group, and also to other customers and verticals,” the company release said.
However, the company did not disclose whether it had withheld the tax it was to pay on acquisition of the Mauritius-based Hutchison Global Services, funded by a combine of internal cash accruals and debt.
Hutchison Global Services, with an associate base of over 11,500 employees, provides customer lifecycle operations to clients in the UK. It operates out of Mumbai and Pune, and is among the largest captives in the telecom domain.
As part of the deal, clients of HGS have committed to procure services worth $845 million from the firm over a five-year period as it will be their exclusive provider of certain agreed services in India.
“This acquisition is in line with our growth plans and is a logical next step in extending our relationship with Hutchison,” said Vineet Nayyar, executive vice-chairman of Tech Mahindra.
“Hutchison’s focused service portfolio, combined with our domain knowledge, geographic spread and execution excellence, will help us become the undisputed leaders in this space and extend these services to other verticals and markets,” Tech Mahindra MD CP Gurnani stated in the release.
Kotak Investment Banking acted as the financial advisor for Tech Mahindra while Hutchison was advised by Goldman Sachs. Ernst & Young and AZB Partners acted as tax and legal advisors, respectively, for Tech Mahindra while Khaitan & Co. acted as the legal advisor for Hutchison.
(Edited by Sanghamitra Mandal)