IT company Tech Mahindra on Monday announced acquisition of 100 per cent stake in Europe-based Com Tec Co IT (CTC) and 25 per cent stake in two insurtech platforms for a total of EUR 330 million (about Rs 2,800 crore). The company said the acquisitions will strengthen its digital engineering and insurance technology businesses.
“It is our largest capital outlay commitment in recent times to grow our digital engineering and insurance technology business,” Tech Mahindra President for BFSI, HLS, and corporate development, Vivek Agarwal said. The acquisition of CTC is the second-largest acquisition that the company has made after scam-hit Satyam in April 2010. Tech Mahindra had invested USD 500 million in Satyam for buying 42 per cent at an enterprise valuation of USD 1.1 billion.
Tech Mahindra acquired Com Tec Co IT (CTC) for 310 million euros (around Rs 2,628 crore), including earnouts and synergy linked payouts. CTC had revenue of EUR 71.3 million in 2020 and has reported a total revenue of EUR 58.8 million in the nine months ended September 2021, according to Tech Mahindra’s regulatory filing.
The total workforce of around 720 employees at CTC will become part of Tech Mahindra. Tech Mahindra is also investing another 20 million euros in acquiring 25 per cent ownership in SWFT Technologies and Surance platform — which are part of the same founding group as CTC.
“The insurance industry is currently undergoing a significant digital transformation which is driven by new emerging business models that are powered by disruptive digital technologies. The new models that will emerge will be driven through disruptive technology. Through these investments in CTC, SWFT and Surance, we are looking to play a key role in the digital transformation of the industry,” Agarwal said.
Tech Mahindra has acquired 25 per cent stake in SWFT and Surance with an option to increase it further, he said. “From a client location perspective, these businesses serve clients mainly in Europe and North America. Some small businesses in Asia. From delivery location perspective, these acquisitions will expand our present in Belarus and Latvia,” Agarwal said.
CTC is an IT solutions and service provider serving the insurance and financial services industries with development centres in Latvia and Belarus. Surance is an end-to-end personal cyber insurance solution that focuses on vulnerability assessment, cyber protection, and cyber insurance coverage.
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