Information technology service provider, Tech Mahindra, has acquired London-based digital firm, The BIO Agency (BIO). Tech Mahindra, part of the Mahindra Group has inked the purchase for £45 million (approx. $66.5 million), in an all-cash deal.
In a ‘Listings Obligation’, Tech Mahindra declared to India’s National Stock Exchange that the cost of consideration is the “enterprise value” of BIO at “£40 million, plus surplus cash not exceeding £5 million.”
The acquisition aims at augmenting Tech Mahindra’s digital portfolio business which currently comprises, digital strategy, service design and customer experience. The BIO Agency specializes in digital transformation and offers design, product innovation, digital retail and e-commerce solution services and will provide client engagement services to Tech Mahindra.
CP Gurnani, MD & CEO, Tech Mahindra said, “The BIO Agency and Tech Mahindra will create one of the world’s leading innovation practices.”
“A combination of BIO’s visionary thinking and delivery with Tech Mahindra’s IT to DT (Digital Transformation) strategy will enable and create digital services, that get industries ready beyond just technology transformation, but a larger integrated customer experience.”
Tech Mahindra, based out of Mumbai, India, will aid BIO gain more clients with this agreement and help expand its customer base, especially in the United States and Europe. According to the IT company, the synergy will enable and enhance new services and a deeper dive into the digital ocean.
The buyout could help Tech Mahindra compete the likes of Infosys, Tata Consultancy Services and Wipro in gaining a mileage over business and revenues. The management of BIO will be also awarded consideration based on revenue they bring to Tech Mahindra over next three years, the statement said.
Peter Veash, CEO, The BIO Agency said:
“We are looking forward to the next stage of BIO’s journey. With a partner like Tech Mahindra, we plan to further scale our offering continuing to help clients change the way they engage with their customers. I am thrilled by the new possibilities of what our two companies will do together”.
Earlier in May, Tech Mahindra acquired Target, a UK-based financial services firm, for $94 million. Prior to this, it acquired Italian car design firm Pininfarina for $28 million and Sofgen (for an undisclosed amount) in December and January, 2015 respectively.