Tech Mahindra Acquired Hutchinson Global Services 2012
Tech Mahindra on September 4th, 2012 acquired the back office unit of Hutchison Global Services ( HGS ), for $87.1 million ( ₹ 484.03 crore ). The deal made with the HGS is supposed to give it a revenue rise of USD 845 million over the next five years which will mark to an average revenue increase of around USD 170 million per annum.
The acquisition will provide significant enhancement of Tech Mahindra’s expertise in the customer management space and will be a key component of strategic plans. The deal will also enable Tech Mahindra to leverage the acquired capabilities and scale for expanding the scope of their existing services to other parts of the Hutchison group and to other customers and verticals.
Hutchison Global Services ( HGS ), basically provides call centre and customer life – cycle operations to customers in UK, Ireland and Australia. Whereas,Tech Mahindra is a leading provider of solutions and services to the telecommunications industry with a majority stake owned by Mahindra & Mahindra Limited, in partnership with British Telecommunications plc. In addition, the acquisition will enable Tech Mahindra to extend services to other Hutchison group companies and also to other customers and verticals, Nayyar added. HGS has operations in Mumbai and Pune and provides customer lifecycle operations to clients in the UK, Ireland and Australia. It has an associate base of more than 11,500 employees.
“Win – win” deal
“This deal is a win – win situation for both the companies. The only shift has been from in – house to outsourced operations. Tech Mahindra will get a business benefit, revenue benefit and a broader relationship will be established,” according to Jatin Bery, Executive Director at Kotak Investment Banking. Kotak Investment Banking was the financial advisor to Tech Mahindra, while HGS was advised by Goldman Sachs. Funding plan. The acquisition would be funded through a combination of internal accruals and borrowings, Nayyar said, adding, “We generate pennies once in a while, and we used them.”
“The benefits of this acquisition will start reflecting from September 4th onwards,” Nayyar, said, adding that there would not be any headcount reduction or change in HGS’ top management. Shares in Tech Mahindra closed up 1.28 per cent at Rs 820.90 on a flat Mumbai market ( BSE ).
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