Tech Mahindra, the country's fifth-biggest software services exporter, announced that it has signed an agreement to acquire a US-based healthcare information technology consulting company CJS Solutions Group LLC, which does business as The HCI Group.
Tech Mahindra, which will acquire CJS through a unit, will make an upfront cash payment of $89.5 million for the acquisition of 84.7 percent stake in CJS with the remaining 15.3 percent to be acquired over three years, the company said.
The move is expected to strengthen position in healthcare provider space and give access to marquee customers and healthcare consultants, the statement added.
"Healthcare is one of the few sectors globally that is driving adoption of digital technologies. The acquisition will not only position Tech Mahindra as a significant player in the healthcare provider space, but will also provide an opportunity to go deeper in this space via EMR implementation and surrounding services route," said CP Gurnani, MD & CEO of Tech Mahindra.
At present, the enterprise value is $110 million. The transaction is expected to close before the end of April.
On the news of acquisition, in Tuesday's trade, share of the IT firm rose 2.13 per cent to hit a high of Rs 509.90 on BSE.
This comes as the first acquisition in eight months for Tech Mahindra. Prior to that, the company acquired UK-based digital services provider Bio Agency for $66 million in June last year.
Indian companies are speeding up acquisitions of US firms with local staff as they try to beat challenges posed by an expected tightening of visa rules in their biggest market.
India's $150 billion information technology industry uses H-1B visas to fly engineers and developers to the United States to provide services to clients.
Any tightening of the visa scheme rules could restrict the companies' ability to send staff to the United States.
Earlier, in an all-cash deal valued up to �120 million, Tech Mahindra bought UK-based fintech firm Target Group to enhance its services in the banking and financial services segment.