Tech Mahindra announced the acquisition of 51% stake on a fully diluted basis in Comviva Technologies Limited for a value of INR 260cr.
The deal will be subject to regulatory approvals. The new brand identity will be Mahindra Comviva, reflecting the combined strength and spirit of both the entities.
As part of this arrangement, Tech Mahindra will make an upfront payment of INR 125cr towards the stake acquired and the balance amount of INR 135cr will be paid out over a period of five years based, on Comviva achieving mutually agreed performance targets.
The current promoters will continue to hold a 20% stake on a fully diluted basis in Comviva, post the deal closure.
Vineet Nayyar, Executive Vice Chairman, Tech Mahindra said “This acquisition is a significant step forward, in our vision of being a complete and comprehensive partner to our clients and like always, we are confident of making this a successful venture for our stakeholders. In addition to the market leading capabilities, this will also add to our relationship with large operator groups across the world.”
This acquisition will significantly enhance Tech Mahindra’s capabilities in the mobile VAS domain and will provide access to a marquee client base, enabling significant cross-selling opportunities.It dovetails into two of Tech Mahindra’s stated strategies, namely investing in emerging areas such as Network, Mobility, Analytics, Cloud and Security and further focus on non-linear growth. Comviva’s primary focus and business model is expected to strengthen this aspiration.
“The world of mobility today encompasses wide range of solutions, where customers be it enterprise or consumers are driving their business and entertainment needs through mobility. This acquisition marks our strong intent and entry into the world of mobility products. We are adding significant capability in areas such as payments and VAS,” added CP Gurnani, Managing Director, Tech Mahindra.
Comviva’s solutions are deployed with over 130 service providers and banks in over 90 countries across Asia, Africa, Middle East, Latin America and Europe, and powers services to more than a billion mobile subscribers.
Tech Mahindra’s vast geographic reach and access to global telecom players will enable Comviva to take integrated solutions and products to a larger base. Comviva will further bring its Managed VAS capabilities to the table, which increases operators’ revenues across VAS services by up to 20%, speed time to market by over 40% and reduce overall VAS delivery and management costs by 35%.
Rakesh Bharti Mittal, Chairman, Comviva said, “We believe that Tech Mahindra, with its deep domain expertise in IT and telecom technologies, is an ideal partner to guide the future growth story of Comviva. We will continue to support Tech Mahindra in their endeavour to take Comviva to the next level and wish them success.”