Zensar to acquire US-based Indigo Slate for about $18 million

IT firm Zensar today said it will acquire US-based Indigo Slate for about $18 million, a move that will strengthen the Indian company's capabilities in the fast-growing digital services segment.

"The company will acquire the entire share capital of Indigo Slate... (The cost of acquisition is) approximately $18 million and deferred payments subject to meeting the performance targets over the 36 months post-closing," Zensar said in a regulatory filing.

The acquisition will be funded by a mix of internal accruals and external debt, it said adding the transaction is expected to be closed within three months.

Indigo Slate is a digital marketing focused customer experience agency with revenues of approximately $20 million in 2017-18. It has 120 employees located in Seattle and San Francisco.

In 2016-17, Zensar had acquired Foolproof, a UK-based digital experience firm to build its digital services business.

"Indigo Slate adds digital marketing expertise in the US, strengthening and broadening Zensar's US based customer experience and digital transformation capabilities," the filing said.

Digital revenues have been growing at 30 percent CAGR for Zensar and contributed to more than 38 percent of Zensar's 2017-18 revenue.

"With Indigo Slate, we have taken another major step towards providing customer experience, digital marketing and design capabilities to our clients in the US," Zensar CEO and Managing Director Sandeep Kishore said.

Aaron Duggal, co-founder and CEO of Indigo Slate, said with Zensar, the company is looking forward to more reach and access to new markets, while leveraging Zensar's expertise in managing large digital transformation mandates.

The deal will bring marquee clients across hi-tech, retail and manufacturing sectors into the Zensar fold, the filing said.