 "Tech Mahindra makes its biggest acquisition abroad, buys LCC for $240 mn")
Mahindra Group’s IT arm Tech Mahindra will acquire US-based network solutions company Lightbridge Communications Corporation (LCC) for $240 million (approximately Rs 1,500 cr).
The deal which is Tech Mahindra’s biggest acquisition outside India will significantly strengthen its presence in the US and is expected to add 20-30 new clients to its billing list
The deal will be finalised subject to regulatory approvals by the end of this fiscal and is funding the acquisition via internal accruals.
Headquartered in McLean, Virginia LCC employees around 5,700 people in 50 countries. LCC reported revenues of $430 million last year, which is around half of Tech Mahindra’s average quarterly revenue. Margins for LCC were reported at around 8% which is way below the 17% that Tech Mahindra reports. LCC’s acquisition is expected to impact Tech Mahindra’s EBIT margin by 100 bps.
Tech Mahindra said that the acquisition of LCC will augment the systematic investments to company has been making in its network services business over the last few years.
 Vineet Nayyar, Executive Vice Chairman said that he expected network services to be a major growth engine for the organization.
CP Gurnani, MD & CEO, Tech Mahindra,said “This acquisition is a defining moment for Tech Mahindra and the network services sector. We will now be the largest and most comprehensive provider of technology services to Communications Service Providers.”
Kenneth Young, CEO of LCC. “Having Tech Mahindra’s breadth of services to provide advanced managed network services coupled with its size and scale, will help us increase the performance of our customers’ ever-evolving networks,” he added.
Earnst and Young was Tech Mahindra’s diligence partner and Dechert LLP was Tech Mahindra’s legal advisor for the deal.
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