Tech Mahindra, India’s sixth-largest IT (information technology) services and solutions company, on Friday announced it had entered into an agreement to acquire Target Group as it strengthens its presence in the BFSI (banking, financial services, and insurance) space. The transaction is expected to close in the second quarter of FY17, subject to regulatory approvals. The total value of the acquisition is £112 million (or $164 million or Rs 1,100 crore) and an adjustment for surplus cash up to £8 million.
Target Group is a provider of business process outsourcing and software solutions. Its fintech platform manages assets in excess of £24 billion. Tech Mahindra will pay £64 million upfront and a deferred consideration of up to £16.28 million in 2017. In addition, the company is also rolling over 7.6 per cent equity value into the Target Group, at present worth £6.8 million, which will be paid out in 2020 as a second deferred consideration depending on the performance of the company during 2017-2019.