IT and engineering services company Cyient on Monday said it has agreed to acquire Australian consulting firm IG Partners, a move that will help the Indian IT firm expand its end-to-end offerings for the local and regional resources sector.
The rationale for the acquisition is gaining access to decision makers with global mining majors, acceleration in Cyient's mining strategy and positioning Cyient as a digital transformation leader in the market, a company statement said.
"The enterprise value shall be payable as follows - upfront AUD 11.6 million on a cash free and debt free basis, and earn outs based on future performance. The time required for completion may range up to six months depending on when the Foreign Investment Review Board (FIRB) approval is granted," Cyient said in a regulatory filing.
Integrated Global Partners Pty Ltd (IG Partners) is headquartered in Melbourne, Australia and employs about 40 employees and consultants. Founded in 2012, its revenue for FY2020 was AUD 14.8 million.
Cyient has a growing presence in Australia, providing solutions to the mining, oil and gas, rail, telecom, and utility industries. With rapid sectoral growth in the region, the company continues to invest in expanding its footprint and creating sustainable value for all stakeholders.
"The IG Partners transaction, the terms of which are confidential and remains conditional on regulatory approvals, will result in Cyient taking full ownership of the global partnership," Cyient said in a statement.
It is intended that all its key management personnel will stay with the business under Cyient ownership, it added.
"Mining is an important focus industry and Australia a strategic region for Cyient's growth. Mining industry is getting transformed with convergence of digital technologies.
"With this investment, the powerful synergy of Cyient's digital execution capabilities and IGP's advisory expertise creates a unique value proposition for the industry," Cyient MD and CEO Krishna Bodanapu said.
This acquisition also adds to Cyient's footprint in Australia, which is an important region for the company's future growth, he added.
Herman Kleynhans, Founder and Managing Partner of IG Partners said in joining Cyient, the company sees tremendous synergies in supporting its customers' benefit from Industry 4.0.
"The combination of Cyient's leading engineering and technology solutions and IG Partner's mining and utilities expertise uniquely positions us to support value and productivity breakthroughs leveraging digital technologies," he added.IG Partners' customers include large mining players comprising multiple Fortune 500 companies. The company has well-established methodologies and a proven track record in transformation within asset and capital-intensive industries.