Overview:
On 26 June 2021, Tech Mahindra announced that it will acquire Brainscale, a cloud transformation consulting company for $28.8m.
Through this acquisition, Tech Mahindra boosts its cloud consulting, cloud enablement, application development and data analytics capabilities for multi-cloud and hybrid cloud environments.
This is the 5th acquisition for Tech Mahindra in 2021 as it continues to execute on its strategy to bolster its digital transformation offerings.
About Tech Mahindra:
Founded in 1986, Tech Mahindra is a global IT and BPO services provider with $5.11bn revenue in FY 21(1). It is a part of the $19bn Indian conglomerate, Mahindra Group.
It offers IT outsourcing, consulting, application outsourcing, network, infrastructure outsourcing and integrated engineering services. It also provides data and analytics, IT infrastructure and cloud services, customer experience solutions, enterprise platforms and enterprise business solutions.
It is headquartered in Pune, India with over 1,007 customers across 90 countries worldwide.
About Brainscale:
Founded in 2007, Brainscale is a leading cloud services and data analytics company which specializes in hybrid cloud and multi-cloud solutions and services
It offers cloud enablement, migration, analytics and managed services for all major public cloud providers like AWS, Google Cloud and Microsoft Azure.
It also provides Microsoft Azure-based solutions like AzCOP, a cloud orchestration and provisioning solution and AzMigrate, a unified portal to help customers gain visibility across all stages of the cloud migration process.
It is Microsoft Gold Partner for cloud platform, application development and data analytics. It has been a Microsoft Partner for 13 years.
It recorded $10m revenue in 2020, the same as 2019 but more than double of the revenue of $4.5m in 2018.
It is based in Princeton, NJ with offices in Toronto, Canada; Pune, India and Bangalore, India.
Rationale of the transaction:
The transaction will be completed at an enterprise value of $28.8m, representing an EV / Sales multiple of c.2.9x based on 2020 financials.
Brainscale strengthens Tech Mahindra’s existing Microsoft Azure consulting practice with the addition of over 120 professionals.
It will enable Tech Mahindra to accelerate growth of cloud IT services business in the North American market.
The transaction is expected to close by 15 August 2021.
The Chesapeake Group was not an advisor in this transaction.
(1) YE: Mar