Tech Mahindra buys Lightbridge Communications Corporation

Tech Mahindra is an Indian Multinational provider of Information Technology, networking technology solutions, and Business Support Services to the telecommunications Industry. It is a part of Mahindra Group. In recent news, the company acquires US based network solutions company Lightbridge Communications corporations for $240 Million.

This is the biggest deal of company outside India, will significantly strengthen its presence in the US, and is expected to add 20-30 more clients in the list. The deal will be finalized by the end of this fiscal and is funding the acquisition via internal accruals. Mahindra group looks to reach its stretch target of $5 Billion in revenue by 2015.

Headquartered in McLean, Virginia, LCC is one of the world’s largest independent global providers of network engineering services to the telecommunications industry, with more than 5000 employees in over 50 countries. With annual revenue of more than $400 Million, LCC has built 350 networks and designed more than 350,000 cell sites for over 400 customers worldwide. The acquisition positions Tech Mahindra as an important partner for network services globally.

This is the largest acquisition so far in this year in the IT services space. In July, India’s third largest software services firm WIPRO had acquired the IT services division of Canadian company Atco for US $195 Million. In September this year, Cognizant said it will acquire US based Trizetto Corporation for US $2.7 Billion in an all cash deal.

Rajendra Singh started LCC in 1983. With its acquisition, Tech Mahindra will become the only Indian IT services provider in the networking services management space, which is dominated by the like of Alcatel Lucent and Ericsson. In April 2013, Tech Mahindra had acquired the lab assets and operations of the Type Approval Lab, which was part of Sony Mobile Communication’s internal test function. 

Cognizant Buys Trizetto

Cognizant is a global leader in information technology, consulting, and business process services. It provide services such as claims processing, billing and call center operations to insurers, hospitals and some state run health care exchanges set up under President Barack Obama’s affordable care Act, as known as Obamacare. Colorado based Trizetto provides information technology services, including care management and the administration of benefits. 

Cognizant struck up its biggest deal, acquiring healthcare IT services provider Trizetto Corp for $2.7 Billion. It is the biggest acquisition in Indian IT sector. Healthcare is undergoing structural shifts due to reform, cost pressure, and shifting responsibilities between payers and providers. Trizetto will provide Cognizant to increase their market share. In 2008, Apax acquired Cognizant, a London based private equity firm. Trizetto was built up through 16 acquisitions in last 15 years, according to their website. It serves about 350 health care plans and supplies software to almost 245,000 doctors and other care providers.

Following this acquisition, Cognizant grip on the segment will increase further, leaving behind peers like WIPRO, Infosys, and TCS. At present, healthcare accounts for around 26 percent of Cognizant revenue, which is estimated to go up to 30 percent on integration with Trizetto. Cognizant and Trizetto have had a long-term relationship. This acquisition represents a great opportunity to integrate services across three horizons. Traditional IT services, high growth businesses like management consulting, business process services, and IT infrastructure services and will provide greater value to clients.

There are lot of acquisitions and changes going on in Indian Healthcare sector. E-commerce sector is focusing on providing medical facilities online. Companies like Ranbaxy, Cipla, and Sun Pharma are into manufacturing of new medical products. IT sector is all set to provide services to clients and hospitals. Tech giants are developing products which includes health apps or which can tell people health status. We can assume that technology is going to play a major role in Healthcare sector and it is going to benefit millions of people. It is estimated that Healthcare business is to grow at a rapid pace.