Mindtree buys L&T's cloud platform for Rs 198 crore

Mindtree has signed an agreement to acquire NxT Digital Business, a startup established by Larsen and Toubro (L&T) for Rs 198 crore.

The acquisition will likely broaden the Bengaluru-based IT firm's digital capabilities in the internet of things (IoT) and Industry 4.0 space by leveraging NxT Digital Business capabilities to cross-sell and create holistic solutions for new prospects as well as for existing clients, the company said in a statutory filing on Thursday.

Competence in this space will strengthen Mindtree's vision to leverage its digital strengths and aim to become a "go-to business transformation partner" for clients, it added.

The filing noted that the total consideration for the deal was "Rs 198 crore including earnouts, subject to adjustments as per the terms of Business Transfer Agreement." The transaction is expected to be completed by July 31, 2021.

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L&T is the promoter/holding company of Mindtree with a 61.03 per cent stake in the Bengaluru-based company. L&T, in a separate filing to the BSE, said it has transferred its digital transformation business undertaking - L&T-NxT (NxT Digital Business) - to Mindtree, pursuant to the execution of a Business Tractor Agreement (''Agreement'') between L&T and Mindtree on Thursday.

The NxT Digital Business was founded as a startup with broad digital capabilities within L&T. Its revenue during the financial year 2020-21 stood at Rs 37.59 crore.

It has played an instrumental role in extensive applications of IoT technology and digitalisation of many aspects of L&T's operations where numerous assets were connected and factories were digitalised to make the company's operations data-driven for objective decision making.

NxT Digital Business leverages the Group's deep industry domain expertise with emerging technologies like industrial IoT, artificial intelligence, machine learning, augmented and virtual reality, geospatial and cybersecurity applications to deliver disruptive business outcomes for its global customers.

"There is a huge opportunity ahead as global manufacturers and industrial companies are increasingly adopting Industry 4.0 focused smart solutions, systems, and processes, but are struggling to leverage data and analytics to drive efficiency and competitive advantage," L&T Chief Executive Officer and Managing Director S N Subrahmanyan said.

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He added that NxT Digital Business experience, talent, expertise, and credentials, coupled with Mindtree's global scale, technology leadership, and deep understanding of domain and delivery, are a powerful combination of focus and capabilities to meet clients' requirements.

"Industrial and manufacturing companies are starting to adopt digital technologies across the value chain, but need a partner with the expertise to strategically connect the dots and generate business value from their data," Mindtree Chief Executive Officer and MD Debashis Chatterjee said.

He added that the acquisition will complement Mindtree's significant strengths in re-imagining consumer experience, positioning the company as one of the leading partners for leveraging data and analytics to drive insights and deliver transformational services to clients.

(With inputs from PTI.)