Tech Mahindra buys US company for $240 million

  • HT Correspondent, Hindustan Times, BANGALORE
  • Updated: Nov 21, 2014 02:32 IST

Tech Mahindra, India’s fifth-largest IT service company, has entered into an agreement to buy US-based network services company Lightbridge Communications Corporation (LCC) for $ 240 million (Rs 1,486.5 crore).

The deal, expected to close by the January-March quarter, makes it the company’s its largest acquisition after it bought over Satyam five years ago.

Tech Mahindra bought trouble-ridden Satyam for Rs 2,889 crore in 2009.

The Virginia headquartered Lightbridge is one of the largest independent global providers of network engineering services to the telecommunications industry, with more than 5,000 employees in over 50 countries, and annual revenues in excess of $400 million (Rs 2,478 crore), said a statement from Tech Mahindra.

“We expect network services to be a major growth engine for our organisation,” said Vineet Nayyar, executive vice chairman of Tech Mahindra.

“We will now be the largest and most comprehensive provider of technology services to communications service providers,” said CP Gurnani, MD & CEO, Tech Mahindra.

Following the acquisition, Tech Mahindra’s revenue for the financial year may see an upward adjustment of 10.3% in 2015-16 from what was estimated earlier, according to Sarabjit Kour Nangra, vice president, research, Angel Broking.

“However, the deal may be margin-dilutive for the near term,” she said. For the financial year 2015-16, Tech Mahindrar's revenue would be Rs 27,484 crore and net profit Rs 3,666 crore, according to Angel Broking estimates.

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