Information technology services company Tech Mahindra has changed its terms to complete two acquisitions that were announced earlier this year, according to regulatory filings on Friday.
Late January, the company said it would acquire a 70% stake in Cerium Systems in an all-cash deal for about $34 million. It had then said it would acquire the remaining stake over two years based on the valuation linked with the company’s financial performance.
Instead, Tech Mahindra has acquired 51% of the Bengaluru-based integrated circuit and embedded software design service provider for the same amount, as per the latest regulatory filing. The balance 49%, it said, will be acquired over three years.
Also, in late February, Tech Mahindra said it would acquire Zen3 Group for $64 million in an all-cash deal. It had then announced it would pay $42 million at the time of the closure of the deal while the balance $22 million would be paid over three years depending on the financial performance of Zen3.
Now, Tech Mahindra will acquire the Seattle-headquartered artificial intelligence company, in a deal expected to be closed by Wednesday, with a change in the timeline of payments. About $35 million will be paid at the closing of the deal, $4 million over two years and the balance $25 million paid over three years linked to financial performance, the company said in a separate regulatory filing.
Early March, Tech Mahindra sold its stake in Terra Payment Services (Netherlands), a step down subsidiary, in a slump sale. The developments assume significance at a time when the Covid-19 pandemic has hit the global economy.
In a pre-Covid-19 world, Tech Mahindra had announced several deals.
In November, Tech Mahindra announced the acquisition of New York-based digital media agency Born Group at an all-cash deal of $95 million. In July, it said it would majority stake in design consultancy firm Mad*Pow. In June, it said it would acquire IT consultancy Objectwise Consulting Group.
In August, Tech Mahindra said it planned to expand to China with its software solutions to the automotive, healthcare, manufacturing and retail sectors in the country.
The IT services sector is starting at a bleak quarter as most other business sectors brace for an economic downturn related to Covid-19 pandemic. The sector was already facing a slowdown, given cuts in IT spending of the banking, financial services and insurance (BFSI) sector.