Mindtree looking at acquisitions for $50-100 million

Mid-sized firm Mindtree is looking at acquisitions in the range of $50-100 million, with an eye to grow its digital business, as well as get access to large clients, which it hopes would constitute 10 per cent of its revenues by 2020.

In an interaction with BusinessLine , Krishnakumar Natarajan, CEO of Mindtree, said that acquisitions will be key going forward.

“The market is not going to wait for us to catch up and we will have to be more proactive regarding M&A,” he said.

Further, the company has brought in Rahul Malhotra to head its mergers and acquisitions group as the company believes that acquisitions in the digital space would help the company grow faster and get access to large clients.

The Bengaluru-based mid sized company has set up a ‘Digital Transformation Group’ which will look at different ways in which digital solutions can impact verticals like retail, insurance, travel and hospitality and hi-tech, areas in which the company has its customers.

At the end of 2015 financial year, Mindtree clocked revenues of ₹3,561 crore.

The company had last acquired Discoverture, which provides insurance solutions in the US in January for $15 million as per reports.

Apart from acquisitions, the company has also streamlined some of its business functions. “We have put in place a focus delivery group which will work across all these above-mentioned verticals and look at how digital can be incroporated in these,” pointed out Natarajan.

Digital technologies, which refers to using of Social Cloud Analytics and Mobility (SMAC), are being increasingly used by companies globally and this is changing the way IT companies are doing business. It is not only Mindtree, which is betting big on digital business.

All the top 5 companies have plans to grow their digital business to a billion dollars in the next few years.

According to Vikas Khemani, President and CEO, Edelweiss Securities, mid-sized IT companies have to look at acquisitions more aggressively now than in the past to stay relevant to their clients.

Sanjoy Sen, a Doctoral Researcher, Aston Business School, said that going forward, every business will be impacted by digital technologies like SMAC and companies are gearing up to that reality.

COMMENT NOW