Tech Mahindra buys HGS for $87.1M

Tech Mahindra has acquired Hutchison Global Services (HGS) for US$87.1 million to enhance the Indian IT vendor's expertise in customer management and widen its reach.

In a statement issued Tuesday, Vineet Nayyar, executive vice chairman of Tech Mahindra, said: "This acquisition is in line with our growth plans and is a logical next step in extending our relationship with Hutchison."

The deal will enhance Tech Mahindra's expertise in the customer management space, which is a key component of its strategy going forward. It builds on the longstanding relationship both companies share across multiple countries, the statement stated.

HGS is a business process outsourcing (BPO) unit of Hutchison Whampoa--which has operations in Mumbai and Pune--providing customer lifecycle operations to clients in the United Kingdom, Ireland and Australia.

Tech Mahindra will also leverage HGS' existing customer base to expand the scope of its existing services. As part of the deal, Hutchison's customers have committed to procure services worth US$845 million over a five-year period and the company will be the exclusive provider of certain services in India.

CP Gurnani, managing director at Tech Mahindra, added  the acquisition strengthens the company's position in the telecommunications space.

"Hutchison's focused service portfolio combined with our domain knowledge, geographic spread, and execution excellence will help us become the undisputed leaders in this space, and extend these services to other verticals and markets."