Tech Mahindra Ltd, India’s one of the largest software services exporter, is in news as it signed an agreement to acquire US-based Lightbridge Communications Corporation (LCC) for $240 million. LCC is a global network services leader. When Tech Mahindra acquires US-based LCC, it becomes the largest acquisition for Tech Mahindra and the transaction is expected to close by fourth quarter of Tech Mahindra’s fiscal year 2015.
LCC is one-of-the largest independent global providers of network engineering services to the telecommunications industry, Headquartered in McLean, Virginia. With annual revenues of more than $400 million, LCC has built 350 networks and designed more than 350,000 cell sites for over 400 customers worldwide. The acquisition positions Tech Mahindra as a preeminent partner for network services globally.
Tech Mahindra Executive Vice Chairman Vineet Nayyar said total cash outflow for the deal is expected to be between US $200-220 million as LCC has a shareholder debt of about US $85 million, some part of which Tech Mahindra may pay later. It will be funded through internal accruals, while speaking to reporters in a conference call.
With this acquisition, Tech Mahindra will also be addressing a rapidly growing market opportunity as telecommunications companies and enterprises accelerate the network upgrade cycle.
“Tech Mahindra’s deep software skills, in combination with LCC’s world-class network engineering capabilities, will further differentiate Tech Mahindra’s offerings to both our communications and enterprise customers,” it said.
According to Market researcher, the acquisition is the largest so far this year in the Indian IT services. In July this year, India’s third-largest software services firm Wipro had acquired the IT services division of Canadian company Atco for US $195 million. In September this year, NASDAQ-listed Cognizant said it will acquire US-based TriZetto Corporation for US $2.7 billion in an all-cash deal. However, since Cognizant is not listed on Indian bourses, Tech Mahindra’s acquisition is the largest so far this year.