Mid-tier IT services company Mindtree, on Thursday, said it had acquired two companies based in the U.S. and the U.K. The company also said it would spend around Rs 482 crore for the deal.
Mindtree has signed a definitive agreement to acquire 100 per cent equity interest in Bluefin Solutions Ltd. (Bluefin), a U.K.-based IT solutions provider specialising in SAP HANA solutions, in an all-cash transaction for £42.3 million (Rs.419 crore). The consideration includes an upfront payment of £34 million (Rs.337 crore) and earn out of £8.3 million (Rs.82 crore) payable over the next three years.
Mindtree's acquisition of Bluefin is part of its latest strategy to strengthen presence in the European market, and also bid for transformation deals.
“We see many existing SAP customers migrating to HANA, and the migration market size itself is around $40 billion. Our acquisition of Bluefin is part of the strategy to capture the market and position ourselves and deliver HANA-based transformation to clients globally,” said Krishnakumar Natarajan, CEO & Managing Director, Mindtree.
The buy-out of the U.K.-based company also provides Mindtree with a strong presence in the market at a time when the company is creating plans to penetrate into the market. This will also give Mindtree more than 60 marquee clients in CPG and manufacturing domain, and a team of 170 experts in the U.K., the U.S., Malasiya and Singapore
Apart from the acquisition of Bluefin, Mindtree has also decided to acquire 100 per cent of the equity interest in the U.S.-based Relational Solutions, in an all-cash transaction for $10 million (Rs.63.5 crore). The consideration includes an upfront payment of $7 million and earn out of $3 million payable over the next two years.
Net profit up
Mindtree’s net profit for the first quarter ended June 30, 2015 stood at Rs.138.2 crore, registering a growth of 6.8 per cent when compared to the same period last year. Revenues stood at Rs.981.6 crore, recording a growth of 16.4 per cent as against the same period last year.
During the quarter, Mindtree signed contract worth more that $200 million, highest in the last five quarters. It added 900 more people, taking the total employee strength to around 14,427 people, while attrition was 18.4 per cent.
“Going forward, we see a strong deal pipeline, and with the deals signed now, we expect to beat Nasscom estimates of 12-14 per cent for FY 2016,” Mr. Natarajan added.