Cyient to acquire Australian tech consulting firm IG Partners

Cyient’s share price, which opened at Rs 412 on the NSE and Rs 409 on the BSE, however, did not pick up after the announcement.

By Srinath Srinivasan

Hyderabad-based technology services exporter Cyient has announced its plan to acquire Australian technology consulting firm Integrated Global (IG) Partners for AU$11.6 million or Rs 62.49 crore for a 100% equity stake.
As per the company’s filings, IG Partners will be acquired by Cyient Australia, a wholly-owned subsidiary of Cyient, in an entire cash transaction.  Based in Melbourne, IG Partners has around 40 employees and consultants. It posted a revenue of AU$14.8 million (Rs 79.72 crore) in FY20 with large customers in mining, comprising Fortune 500 companies. Cyient intends to retain the key management personnel at IG Partners under its ownership.

According to Cyient, the acquisition is strategic as it will help them gain access to decision-makers with global mining majors and accelerate its mining strategy to position itself as a market leader in digital transformation. As part of the filings, the company has given a time period of up to six months for the completion of the acquisition depending on when the Foreign Investment Review Board (FIRB) grants approval.

The company said the deal will help strengthen its capabilities in mining and energy industries with focus on enterprise asset management, mining 4.0 (IT and data-based minerals exploration) and operational efficiency.  Commenting on the proposed acquisition, Cyient MD and CEO Krishna Bodanapu said: “Mining is an important focus industry and Australia a strategic region for Cyient’s growth. The mining industry is getting transformed with convergence of digital technologies. With this investment, the powerful synergy of Cyient’s digital execution capabilities and IGP’s advisory expertise creates a unique value proposition for the industry. This acquisition also adds to our footprint in Australia, which is an important region for our future growth.”

Cyient’s share price, which opened at Rs 412 on the NSE and Rs 409 on the BSE, however, did not pick up after the announcement. The price fell to Rs 388.30 on the NSE and Rs 388 on the BSE by the close of the day. Analysts have given a ‘sell’ rating for the stock and expect the price to touch Rs 513 by the end of the week, a 52-week high for the company.

In FY20, the company posted a revenue of Rs 1,523.1 crore and in Q1FY21, a revenue of Rs 340.1 crore. The profits stood at Rs 248 crore and Rs 90.9 crore in FY20 and Q1FY21, respectively. The company also maintained a dividend pay out of Rs 15 per share despite a de-growth in net profit in FY20 and has not reported any debt.