IT company Cyient on Thursday said it will acquire Singapore-based Grit Consulting for USD 37 million (about Rs 284 crore) in an all-cash deal. Grit Consulting has expertise in consulting for asset-intensive industries like metal mining and energy and the acquisition will enable Cyient customers across sectors to draw value from the Grit's deep knowledge and Cyient's technology solutions capabilities.
Cyient is acquiring Grit Consulting at an "enterprise value of USD 37 million on a debt-free, cash-free basis. This translates to 2.04 times of FY'22 revenue and 6.8X times of FY'22 EBITDA," the company said in a regulatory filing. The company will pay 50 per cent of the consideration and remaining 50 per cent as an earnout over the next two years, subject to business performance, according to the filing.
The deal is expected to close by May 5, 2022. "We are expanding our Cyient Consulting practice with this investment. It aligns with our consulting-led growth strategy, and we see great synergies across talent, footprint, and customers. With Grit Consulting's expertise in business transformation and our technology solutions capabilities, we can deliver strategic outcomes for our customers," Cyient MD and CEO, Krishna Bodanapu, said in a statement.
The global consulting services market is expected to cross USD 1.2 trillion by 2025, and the acquisition of Grit Consulting will empower Cyient to accelerate its consulting capabilities and deliver innovative technology solutions to its customers, the statement said."We believe that this coming-together of Cyient's technology solutions and our innovative socio-technical design consulting approaches will further strengthen our capabilities to enable sustainable performance improvements and cultural enhancement across the organization," Grit Consulting founding partner Jeremy Brown said.