Tech Mahindra acquires European firm Com Tec Co IT for 310 mn euros

Tech Mahindra on Monday announced 100 per cent acquisition of Com Tec Co IT Ltd (CTC) for 310 million euros (around Rs 2,628 crore), a deal which includes earnouts and synergy-linked payouts. In addition, the company has also acquired 25 per cent stake in two IT platforms, which are part of the same founding group as CTC, for 20 million euros.

The acquisition will enable Tech Mahindra to tap onto the potential industry disruption in the Insurance sector, expand its offerings to high-end digital engineering services for some of the largest insurance, re-insurance and financial services organisations globally and scale its nearshore delivery presence, the company said in a statement.

CTC is an IT solutions and service provider serving the insurance and financial services industries with development centres in Latvia and Belarus.

The acquisition of CTC is the second-largest acquisition that the company has made after scam-hit Satyam in April 2010.

Moreover, Tech Mahindra also said that it investing another 20 million euros in acquiring 25 per cent ownership in SWFT and Surance platform-- which are part of the same founding group as CTC.

SWFT is a SaaS-based digital customer engagement platform, while Surance is an end-to-end personal cyber insurance solution that focuses on vulnerability assessment, cyber protection, and cyber insurance coverage.

Vivek Agarwal, President - BFSI, HLS, and Corporate Development, Tech Mahindra, said, “The Insurance industry is currently undergoing a significant transformation which is driven by new emerging business models, that are powered by disruptive digital technologies. In order to enable this digital transformation, we are investing in strengthening our capabilities to support insurers in accelerating their transition to cloud-based platforms and provide end-to-end engineering with a strong European nearshore presence. We welcome the CTC team into the Tech Mahindra family, and we expect to achieve significant market and service line synergies through this combination.”

Shares of TechM on Monday closed 1.01 per cent down at Rs 1,721.65 apiece on BSE.