Tech Mahindra acquires controlling stake in Comviva

Tech Mahindra Limited, India’s sixth largest software exporter announced the acquisition of a 51 per cent stake on a fully diluted basis in Comviva Technologies Limited, a Bharti Group company, and a global player in providing mobile value added services (VAS), mobile money and mobile payment solutions, for a value of INR260 crore(US$49.2 million). The deal will be subject to regulatory approvals.

The new brand identity will be Mahindra Comviva, and as part of this arrangement, Tech Mahindra will make an upfront payment of INR125 crore towards the stake acquired and the balance amount of INR135 crore will be paid out over a period of five years based on Comviva achieving mutually agreed performance targets. The current promoters, Bharti Group, will continue to hold a 20 per cent stake on a fully diluted basis in Comviva, post the deal closure.

This acquisition will significantly enhance Tech Mahindra’s capabilities in the mobile VAS domain and will provide access to a marquee client base, enabling significant cross-selling opportunities. It dovetails into two of Tech Mahindra’s stated strategies, namely investing in emerging areas such as Network, Mobility, Analytics, Cloud and Security; and further focus on non-linear growth.