Bengaluru-based IT firm Happiest Minds has acquired Madurai-based IT services company Sri Mookambika Infosolutions (SMI) for a combined upfront and deferred equity payment of ₹111 crore.
Happiest Minds will also take on 400 SMI employees based in offshore locations. As of the December quarter, Happiest Minds had a total employee strength of 4,611.
The company stated in a regulatory filing that SMI is a profitable company with an annual revenue run rate of $9 million as of FY22.
The acquisition will add to Happiest Minds healthcare vertical strength and align with its Product Engineering Services business unit, according to Joseph Anantharaju, executive vice-chairman and CEO of Product Engineering Services at Happiest Minds.
Managing Director and CFO Venkatraman Narayanan said the acquisition will bring expertise in healthcare and a talented workforce in the Madurai and Coimbatore locations.
SMI’s client base is primarily US-based companies.
The acquisition was announced shortly before the close of markets on Wednesday and shares of Happiest Minds closed 1.67% down at ₹861.80.
The company reported its Q3 financials on January 19, showing a 3.2% increase in rupee revenue to ₹366.88 crore and a 3.1% decline in net profit to ₹57.58 crore. The company also reported an operating margin decline of 110 basis points to 15.4% and attrition at 20.9%.
Anantharaju stated that the company expects to continue growing as clients invest heavily in cloud, experience, and analytics as part of their digital initiatives.
He added that Happiest Minds has a strong pipeline of large deals, many with Fortune 500 companies.
The IT services sector has seen consistent deal signings in a traditionally weak quarter, with digital services such as cloud and automation driving deals.
Kumar Rakesh, VP of equity research at BNP Paribas, said deal signings improved in North America and were decent in Europe and the rest of the world.
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