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Prabhudas Lilladher Report
Tech Mahindra Ltd. announced acquisition of 100% stake in Com Tec Co IT, digital engineering and transformation provider serving Insurance industry for €310 million (~$353.7 million) including €100 million earnouts payable over four years. CTC generated revenue of €71.3 million (~$81.36 million) in CY20 which amounts to 2% of Tech Mahindra's FY21 revenue.
In nine months-CY21 it reported revenue of €69 million(~$78.7 million) - (quarterly run-rate of $26 million versus $20 million in CY20). About 60% of its revenue are from an anchor client.
CTC's valuation of 4.3 times enterprise value/sales is at upper end of similar transactions in this space. It is Tech Mahindra's largest and among its most expensive acquisitions, compelling the company to drive cross-selling deals for scaling up in insurance space.
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