IT services and consulting major Tech Mahindra has agreed to buy U.S. based information technology firm Allyis Group for $125 million in cash, the company announced Friday. The company’s board agreed to buy a 100% equity stake in Seattle-headquartered firms Allyis India Private Limited and Green Investments LLC through their holding company Allyis Group.
“The company approved the proposal to acquire 100% equity shares in Allyis India Private Limited and the company’s wholly owned subsidiary viz Tech Mahindra (Americas) Inc. approved the proposal to acquire 100% equity shares in Green Investments LLC, holding company for Allyis Group,” Tech Mahindra said in a statement.
The announcement comes as Tech Mahindra stock has been rallying on NSE peaking to a 52-week high on Thursday. The company’s stock, which opened at Rs. 1800 apiece today, is up about 80% year-to-date. At a fresh 52-week high of Rs 1,825.65 on Thursday, the company broke its previous record of Rs 1,822 which was hit on Tuesday this week.
Tech Mahindra said the company’s plan to acquire 100% equity stake in Seattle based Allyis Group will help bolster its business in areas such as cloud and automation engineering, analytics, and technical support services. For the fiscal year 2020, the target had revenue of $39.6 million while in the current year, for the first 11 months, the turnover stood at $45.7 million.
In the quarter ended September 30, Tech Mahindra reported a revenue of Rs 8,464.8 crore and net profit of Rs 1,559.51 crore. Brokerage firm Edelweiss Wealth Research has increased price target for the company at Rs 2,050 per unit and ICICI Direct has set a target price of Rs. 2150 per share for the company.
“Tech Mahindra maintained its strategy to undertake M&A activities with the intention to acquire specific capabilities or capture identified opportunities. The company closed three acquisitions in Q3FY22, strengthening its competence in digital product engineering, customer experience solutions and e-commerce capabilities,” Edelweiss Wealth Research said in a note.
Earlier this month, the company said it has acquired a 100 percent stake in work from home solutions firm Activus Connect for $62 million.