Tech Mahindra takes over DigitalOnUS in a $120 million deal

By Hope Hill |

Information technology and business process outsourcing firm Tech Mahindra recently announced the acquisition of 100% stake in California based hybrid cloud services provider, DigitalOnUS. The move is a part of Tech Mahindra’s plan to strengthen cloud-native development, Site Reliability Engineering (SRE) and hybrid cloud infrastructure.

As per the regulatory filing by Tech Mahindra, the deal is valued at up to $120 million and is inclusive of retention bonus and Earnout. The company will further acquire DigitalOps Technology, the Indian subsidiary of DigitalOnUs. Tech Mahindra Americas will reportedly buy all the other legal entities of DigitalOnUs.

The move underlines the IT behemoth’s emphasis on digital growth and is a part of NXT.NOW framework focused on leveraging next-gen technologies to enable the delivery of disruptive solutions ‘today’. The takeover of DigitalOnUs will significantly enhance the firm’s hybrid-cloud offerings and help meet the dynamic and evolving needs of its global customer base.

Vivek Agarwal, President- Corporate Development, BFSI and HLS, Tech Mahindra cited that the acquisition of DigitalOnUS will equip the firm to develop cutting-edge digital solutions. He further added that scaling up nearshore delivery capabilities with a majority in Canada and Mexico will play an important role in executing digital transformation programs.

As per a statement by the IT major, the strategic move will also help Tech Mahindra position itself as a partner of choice for hybrid-cloud digital transformation, providing new-age capabilities including cloud-native development technologies and enterprise DevOps.

Suri Chawla, the CEO and founder of DigitalOnUS reportedly termed the move as a critical step for DigitalOnUS’s growth path as the company will explore significant opportunities with its extensive global reach and enhanced customer access.

DigitalOnUS’s near shore delivery capability and its large presence in Mexico will play a key role in execution of digital transformation programs. The acquisition will augment Tech Mahindra’s cloud native engineering capabilities and help the firm in developing cutting-edge digital solutions.

As per sources familiar with the matter, Tech Mahindra will also leverage DigitalOnUS’s expertise to modernize IT security, build multi-cloud platforms and unlock cloud operating model to enable enterprises accelerate cloud modernization.

For the record, headquartered in San Jose, the US, DigitalOnUS has more than 380 employees. As per reliable sources, the firm’s revenue was recorded at $30.6 million for the financial year ending December 31, 2020.



Source Credits:

https://www.business-standard.com/article/companies/tech-mahindra-acquires-100-stake-in-us-based-digitalonus-for-120-million-121041901317_1.html

https://www.moneycontrol.com/news/business/tech-mahindra-acquires-digitalonus-for-120-million-6792721.html

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