Tech Mahindra rose 4.07% to Rs 557.50 at 10:45 IST on BSE after the company entered into an agreement to acquire UK-based Target Group for an enterprise value of GBP 112 million.
Tech Mahindra made the announcement of the acquisition after trading hours on Friday, 27 May 2016.Meanwhile, the S&P BSE Sensex was up 5.53 points or 0.02% at 26,659.13
On BSE, so far 1.71 lakh shares were traded in the counter as against average daily volume of 1.85 lakh shares in the past one quarter. The stock hit a high of Rs 563.75 and a low of Rs 536 so far during the day. The stock had hit a 52-week high of Rs 581.95 on 28 September 2015. The stock had hit a 52-week low of Rs 407.50 on 29 February 2016. The stock had outperformed the market over the past one month till 27 May 2016, rising 11.69% compared with Sensex's 2.26% gains. The scrip had also outperformed the market in past one quarter, gaining 28.42% as against Sensex's 15.11% gains.
The large-cap company has equity capital of Rs 485.26 crore. Face value per share is Rs 5.
Tech Mahindra has entered into an agreement to acquire UK-based Target Group for an enterprise value of GBP 112 million. The transaction is expected to close by 31 October 2016, subject to the receipt of regulatory approvals. Target Group is a financial technology (Fintech) and BPaaS (Business Process as a Service) provider in the banking, asset management, government and insurance sectors. Tech Mahindra said that the acquisition will broaden its service offerings in the banking, financial services and insurance (BFSI) domain and strengthen its presence in Europe. The acquisition will enhance Tech Mahindra's capabilities and allow Tech Mahindra to capture a larger share of the GBP 45-60 billion annual spend by UK BFSI companies on software and services.
Target Group had revenue of GBP 51 million in the year ended 31 December 2015 (FY 2015). After the completion of the acquisition by Tech Mahindra, Target Group will remain a standalone entity retaining its existing brand, which has a strong reputation in the marketplace. The entire management team at Target will stay with the business and continue to have full operational responsibility.
Tech Mahindra's consolidated net profit rose 18.15% to Rs 897 crore on 2.72% rise in revenue from services to Rs 6883.70 crore in Q4 March 2016 over Q3 December 2015.
Tech Mahindra is a specialist in digital transformation, consulting and business re-engineering solutions.
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