The acquisition will happen over the next three years.
Tech Mahindra, the Mumbai-based software exporter, has announced that it has sealed an acquisition deal with US-based healthcare IT consulting firm CJS Solutions Group for a whopping $110 million.
According to Tech Mahindra, which is the fifth largest IT company in India, the acquisition will happen over the next three years.
Tech Mahindra announced that it will make an upfront payment of $89.5 million for the 84.7% of the total stake of CJS and the remaining 15.3% stake will be bought over the period of next three years.
CJS Solutions, which operates under the HCI Group specializes in the implementation of electronic medical records (EMR) software.
According to the sources inside Tech Mahindra, healthcare and life science are sectors that account for 7% of the company’s revenue and this has been one of the key areas of interest for the company. They believe that the current acquisition of CJS will help the Indian technology firm to accelerate in the healthcare field.
Ernst & Young and Allen & Company LLC were the advisors of Tech Mahindra and HCI Group,
The first round of payments is expected to be made by the end of April, this year.
According to reports, Indian IT companies have hastened the acquisitions of US firms that have local staff as they expect stricter imposition of visa regulations in the coming months.
Indian IT companies are the biggest beneficiaries of is the H-1B visa that is used to hire Indian engineers and developers to the US.
Even the slightest change in the current H-1B visa policy will have huge repercussions on Indian IT companies.
President Donald Trump’s administration last week announced temporarily suspension of its premium processing service for H-1B visas.