Software services company Tech Mahindra Ltd said on Tuesday it has agreed to acquire a majority stake in US design consultancy Mad*Pow Media Solutions LLC.
The Indian company will first acquire a 65% stake in Mad*Pow by the end of this month and may buy the remaining stake over the next three years depending on the US firm’s financial performance.
The enterprise value of 100% of the target company is $25.3 million (Rs 174 crore), Tech Mahindra said in a stock-exchange filing.
The deal is likely to bolster the company’s capabilities in customer experience and digital transformation such as research and testing, content strategy, data science and analytics, Tech Mahindra said.
The transaction is expected to be completed by the end of this month.
Mad*Pow, which was founded in 2000, offers user-centered design services to a wide range of clients in the US. It has a headcount of around 70 employees. The company clocked revenue of $14.7 million in the year ended 31 December 2018.
Tech Mahindra’s acquisitions
This is the latest acquisition by Tech Mahindra. In its 2018 annual report, the IT firm had said that it was aggressively setting up and buying platforms.
Just last month, the CP Gurnani-led company said it is acquiring Canada-headquartered IT consultancy Objectwise Consulting Group Inc for CAD 2.75 million.
In April, the IT firm said it will acquire 18.1% stake each in Infotek Software & Systems Pvt. Ltd and Vitaran Electronics Pvt. Ltd for a total of up to Rs 13 crore.
The software services company said it would use the two firms’ presence in the radio-frequency identification (RFID) segment to build a footprint in the asset monitoring, tracking and automated billing solutions market.
In January last year, it had bought 17.5% stake in US-headquartered telecom software development firm Altiostar Networks Inc. for $15 million.
In December 2017, Tech Mahindra had agreed to buy an additional stake in Comviva Technologies Ltd -- a mobile financial and value-added services (VAS) solution provider -- from the Bharti Group and private equity firm WestBridge Capital. After this acquisition, the company’s holding in Comviva Technologies increased to 99.17%.