Tech Mahindra Seeks Deals in France, ScandinaviaMatthew Campbell and Bianca Vázquez Toness
Tech Mahindra Ltd., the Indian software-services company that bought Satyam Computer Services Ltd., is studying acquisitions to improve its access to companies in Europe and to add heft in banking and financial services.
“M&A is part of my strategy, it is an integral part of my strategy,” Chief Executive Officer C.P. Gurnani said in an interview at the World Economic Forum in Davos, Switzerland. “Lot of non-English speaking countries where I have very limited presence, which is eastern Europe, France and Scandinavia. I will look at market reach.”
Tech Mahindra, which bought control of Satyam in 2009 and then merged with it in 2013 in a transaction valuing the target at 89.9 billion rupees ($1.5 billion), has actively pursued acquisitions to bolster revenue. The company also will target deals to add assets in engineering and financial services, Gurnani said.
The Indian software provider, based in Pune, announced in November it had agreed to acquire McLean, Virginia-based Lightbridge Communications Corp. for an enterprise value of about $240 million. The transaction is expected to close by the quarter ending in March, it said at the time.
Gurnani also echoed comments made by larger competitor Wipro Ltd.’s CEO T.K. Kurien this week on the impact sliding oil prices had had on contracts with energy companies.
“They are pulling back, asking for deferment of every project which they can,” Gurnani said of oil-sector clients. However, they contribute less than 5 percent of Tech Mahindra’s revenues, making the impact limited, he said.
Mahindra & Mahindra Ltd., India’s largest sports utility vehicle maker, owns 26.7 percent of Tech Mahindra, according to data compiled by Bloomberg.
The company’s shares have gained 50 percent over the last 12 months, compared with the 36 percent advance in the benchmark S&P BSE Sensex Index.
Tech Mahindra also expects to tap the “gold rush” in terms of demand from clients to enable cloud, mobility and social media for their businesses, Gurnani said. The surging use of mobile phones and hand-held devices to access the Internet and smartphone applications is driving companies across industries to innovate ways to boost customer interaction.
“A shovel-supplier is always in business,” he said. “I’m a shovels guy. That’s where I see our relevance to the business.”