Mid-tier information technology (IT) services firm Cyient said it has acquired Australian consulting firm IG Partners at an enterprise value of AUD $11.6 million (Rs 63 crore).
While the Hyderabad-based company did not mention the financial terms of the deal in its disclosure to the stock exchanges, it said the amount was paid upfront, on cash-free and debt-free terms, and included earn-outs on the basis of future performance. It is not clear how much debt, if any, IG Partners carries on its books.
The company’s shares dropped by more than 3% on the Bombay Stock Exchange during the day, when the broader index fell 2.1%.
The acquisition, Cyient said, will strengthen its digital capabilities in the energy and mining industries. Melbourne headquartered IG Partners will also aid with the expansion of Cyient’s end-to-end offerings for the local and regional resources sector, it added.
Cyient said that it has a growing presence in Australia, providing solutions to the mining, oil and gas, rail, telecom and utility industries.
“The mining industry is getting transformed with convergence of digital technologies. With this investment, the powerful synergy of Cyient’s digital execution capabilities and IGP’s advisory expertise creates a unique value proposition for the industry. This acquisition also adds to our footprint in Australia, which is an important region for our future growth,” Krishna Bodanapu, managing director and CEO, Cyient, said.
According to Cyient, its operational efficiency, asset optimisation and digital transformation capabilities, combined with IG Partners' value creation and transformation in asset and capital-intensive industries, will benefit customers of both companies.
It will also leverage IG Partners’ IT and operational technology convergence, exploration data compilation and minerals exploration data management capabilities in the mining industry. By bringing operational efficiency, the companies can digitally enable workforce for customers by providing advanced analytics and machine learning, supply chain and automated planning solutions, the company said.
IG Partners, formed in 2012, consists of partners, practice leads, consultants, project managers and analysts. The company reported revenues of AUD $14.8 million in 2020 and AUD $10.3 million in financial year 2018-19. It provides enterprise asset management solutions, such as predictive maintenance and warranty management.
It counts large mining players, including Fortune 500 companies, as customers. The company has well-established methodologies and a proven track record in transformation within asset and capital-intensive industries.
Cyient said it looks to retain all of IG Partners' key management personnel.
“In joining Cyient, we see tremendous synergies in supporting our customers' benefit from Industry 4.0. The combination of Cyient's leading engineering and technology solutions and IG Partner's mining and utilities expertise uniquely positions us to support value and productivity breakthroughs leveraging digital technologies," Herman Kleynhans, founder and managing partner of IG Partners, said.
In June, Cyient collaborated with Microsoft to accelerate the deployment of internet of things (IoT) services for its customers. As part of the Microsoft Azure Certified for IoT programme, Cyient will have pre-tested hardware and software that are verified to work with Microsoft Azure IoT services, thereby ensuring faster implementation of solutions, it said.