IT consulting and outsourcing company, Mahindra Satyam (formerly Satyam Computer Services Limited), has signed an agreement with New Delhi-based Dion Global Solutions Limited to acquire a strategic stake in the latter by way of fresh issue of equity shares.
“Mahindra Satyam will pick up around 15% stake in Dion Global initially, which is expected to be increased at a later stage,” a top official of Mahindra Satyam said, requesting anonymity.
In a filing to the BSE on Friday, Mahindra Satyam said the new equity shares will be priced at in accordance with the applicable Sebi regulations, and that the transaction will be subject to regulatory and board approvals.
Owned by billionaire brothers Malvinder Mohan Singh and Shivinder Mohan Singh, Dion Global Solutions is a publicly-listed company offering solutions and services for global capital markets covering portfolio management, trading, settlement, risk management, analytics, treasury and research services.
The company, which services more than 660 clients in 62 countries, intends to utilise the proceeds from the Mahindra Satyam investment under consideration to further enhance its offerings and its geographic reach.
“We are extremely impressed by Dion’s products and solutions, its ability to truly partner with its clients, and most of all, its top-class management team. We are convinced that in time to come, Dion will become one of the foremost software solutions providers to capital markets globally and are keen on participating in Dion's promising future,” Mahindra Satyam chief executive C P Gurnani said in a press release.
This is for the first time that the new management of the fraud-tainted company is loosening its purse strings to tread the inorganic growth path. Mahindra Satyam currently has consolidated cash and cash equivalents of over Rs 3,000 crore.
“It’s our careful husbanding that has kept this money available to us. If an opportunity presents itself, we are always looking for acquisition deals. But we do acquisitions not for purely growing the company but for strategic reasons. To get into areas where we are not present,” Mahindra Satyam chairman Vineet Nayyar had earlier told Business Standard.
Mahindra Satyam‘'s scrip is currently trading at Rs 71.50 on the BSE, down 1.17%, as against the previous close of Rs 72.35, while Dion’s stock rose 4.85 to Rs 33.50.