TCS to acquire 100% stake in PBS from Deutsche Bank; share price falls

Tata Consultancy Services (TCS) share price fell in early trade on November 10 after the company said it is going to acquire Postbank Systems from Deutsche Bank.

The company and Deutsche Bank AG announced an agreement under which TCS will acquire 100 percent of the shares of Postbank Systems AG (PBS) from Deutsche Bank AG, the company reported bourses.

PBS is the full-range captive IT service provider that provides project management, application management and infrastructure support services to Postbank and other subsidiaries of Deutsche Bank

This will further add to TCS’ scale in Germany and strengthen its growth outlook.

The transaction is subject to both parties finalizing further agreements, which they intend to do by end 2020. Furthermore, the transaction is subject to customary regulatory and governmental approvals.

“We warmly welcome Postbank Systems’ IT professionals into the TCS family, and invite them to avail of the learning and development opportunities here, and help script the next chapter of TCS’ growth in Germany,” said N G Subramaniam, Chief Operating Officer and Executive Director, TCS.

Kotak Institutional Equities

Research house has kept reduce rating with a target of Rs 2,800 per share. The PBS acquisition will provide minimum incremental revenue of 450 million euros over five years. The expensive valuations keep research firm cautious on the stock, reported CNBC-TV18.

Macquarie

Macquarie has maintained outperform rating with a target at Rs 3,070 per share. The PBS acquisition will strengthen the company’s position in the German market and would add $310 million to revenue in CY21. Macquarie raise FY21-23 EPS estimates by 0.3-1.3 percent, reported CNBC-TV18.