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Mumbai, Aug. 28 Telecom Solutions Company Tech Mahindra has agreed to acquire a 17-per cent minority equity stake in UK-based systems integrator Servista.

This move will support Tech Mahindra’s expansion into the European market place and will significantly enhance its business development capability, according to a statement issued by the company here on Thursday.

However, financial terms of this development were not disclosed.

As a part of the agreement, Tech Mahindra will be Servista’s exclusive delivery arm for three years and will also assist Servista in securing more large scale European IT offshoring business.

This announcement comes a day after the Mahindra group company denied reports of European telecommunications major BT selling its stake in Tech Mahindra .

(BT has a direct investment of about 31.04 per cent in Tech Mahindra).

Servista has been Tech Mahindra’s client for the past few years.

The London-based company provides managed IT services on an offshore basis with core offerings in operating and business systems such as customer relationship management, operational workflow, IT systems transformation and testing, the company statement said.

“There is substantial potential for growth, which is reflected in current demand, as European companies are at relatively early stages in their use of IT offshoring for competitive advantage, compared to their American counterparts,” said Mr Ben Andradi, Chief Executive Officer, Servista Ltd.

Servista is a privately-held company with investments from private equity investors such as Sofinnova Partners, HarbourVest Partners, Nova Capital Management and others.

The Tech Mahindra scrip was down by 5.22 per cent to Rs 736.5 on the BSE on Thursday.

More Stories on : Mergers & Acquisitions | Software | Overseas Investments

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