30 May 2016 Current Affairs: Tech Mahindra, India’s sixth-largest IT (information technology) services and solutions company, on Friday announced it had entered into an agreement to acquire Target Group as it strengthens its presence in the BFSI (banking, financial services, and insurance) space. The transaction is expected to close in the second quarter of FY17, subject to regulatory approvals. The total value of the acquisition is £112 million (or $164 million or Rs 1,100 crore) and an adjustment for surplus cash up to £8 million.
Target Group is a provider of business process outsourcing and software solutions. Its fintech platform manages assets in excess of £24 billion. Tech Mahindra will pay £64 million upfront and a deferred consideration of up to £16.28 million in 2017. In addition, the company is also rolling over 7.6 per cent equity value into the Target Group, at present worth £6.8 million, which will be paid out in 2020 as a second deferred consideration depending on the performance of the company during 2017-2019.
The acquisition catapults Tech Mahindra to one of the top three processors in UK financial services for certain complex lending and investment product categories. It also strengthens Tech Mahindra’s European presence and adds several new clients.
Headquartered in the UK, the Target Group has 740 employees and a client franchise including Goldman Sachs, Morgan Stanley, Credit Suisse, specialist lender Shawbrook, and Yorkshire Building Society.
The Target Group has been focused on building expertise in the lending, investments and insurance sectors, becoming a market leading player in each of our verticals. We have delivered significant growth over the last four years, with the support of our current shareholder, Pollen Street Capital. We now look forward to the next stage in our growth. By joining with the $4 billion Tech Mahindra, it will allow us to serve our clients better, greatly expanding the solutions and services we provide.