IT major Tech Mahindra has acquired the entire stake in US-headquartered hybrid cloud and DevOps services provider DigitalOnUS for $120 million, including retention bonus and earnout payments.

The acquisition will strengthen Tech Mahindra’s cloud-native development, hybrid cloud infrastructure and site reliability engineering automation, it said in a regulatory filing.

Based out of California, the company has more than 380 employees. For the financial year ending December 31, 2020, the company had revenue of $30.6 million. The transaction is expected to close by May 15.

Vivek Agarwal, President- Corporate Development, BFSI and HLS, Tech Mahindra, said: “The acquisition of DigitalOnUs marks an important milestone in Tech Mahindra’s growth journey, and will further enhance our capability in cloud native engineering, and better equip us to develop cutting-edge digital solutions for our customers. Scaling up near shore delivery capability, with majority in Mexico and Canada will be critical to execute digital transformation programmes”.

The acquisition will further elevate Tech Mahindra’s position as a partner of choice for hybrid-cloud digital transformation, providing end-to-end transformation and new-age capabilities including enterprise DevOps and cloud native development technologies.

Additionally, Tech Mahindra will leverage DigitalOnUs expertise to build multi-cloud platforms, modernise IT security and unlock the cloud operating model for enterprises to accelerate their cloud modernisation journey.

Suri Chawla, Founder and CEO, DigitalOnUs, said: “The acquisition by Tech Mahindra represents an important step in DigitalOnUs’s growth journey as it provides our organisation and its people with extensive global reach and customer access to scale and tap into many more significant opportunities. Our team at DigitalOnUs is looking forward to being a part of Tech Mahindra and continuing to offer innovative, agile and industry leading services to our current and future customers”.

Tech Mahindra will acquire the Indian subsidiary of DigitalOnUs — DigitalOps Technology Pvt Ltd — and Tech Mahindra Americas will acquire all the other legal entities of DigitalOnUs, it added.

On March 15, Tech Mahindra had acquired a 70 per cent stake in Perigord Asset Holdings Ltd, a digital workflow and artwork, labelling and BPO services firm, to augment expertise in the global pharmaceutical, healthcare and life science sectors.