Friday, July 19

Tech Mahindra Acquire 65% Stake of US Design Firm For $70 mn

Indian IT company Tech Mahindra will pay USD 70 million (about Rs 490 crore) to acquire 65 percent stake in US-based strategic design consultancy firm Mad*Pow.

“We are buying 65 percent upfront and for that 65 percent we are paying about USD 70 million and the balance 35 percent will be acquired subsequently from the management team and the founders…,” Vivek Agarwal, head for corporate development & BFSI at Tech Mahindra Limited, said in a call with analysts.

The company announced plans to acquire Mad*Pow on July 30.

Tech Mahindra MD and CEO CP Gurnani said Mad*Pow is a 70-people strong organisation with capability in customer experience, human center design and understanding of behavioral science which will give Tech Mahindra a significant edge in digital transformation projects.

Agarwal said Mad*Pow’s revenue for the current year is at USD 17.5 million (about Rs 122 crore) and the margin is in the mid-teens.

“The way we have looked at this acquisition is significant part of synergy opportunity across healthcare, financial services and the media industry…,” he said.

Mad*Pow acquisition is expected to help Tech Mahindra boost its capabilities in customer experience and digital transformation, user experience design, behaviour change design, content strategy, mobile app and web development, data science and analytics, among others.