In a significant development, mid-sized IT firm MindTree has announced the appointment of Krishnakumar Natarajan as its executive chairman with effect from April 1, 2016. He will take over from Subroto Bagchi, who will step down from his role as executive chairman but will continue on the board as a non-executive director.
The current CEO Natarajan will be replaced by Rostow Ravanan, who is currently Head for Europe, Service Lines and Key Accounts. Rostow had stepped down as CFO in April 2014.
Apurva Purohit, Independent Director and Chairperson of the Nomination and Remuneration Committee of the Board said, “This is the culmination of a year-long succession planning exercise that the Board had undertaken after carefully considering several candidates. We are very happy with the process and the outcome.” The Board recognises and thanks Subroto for his invaluable contributions and inspirational leadership, she said.
Commenting on the development, Bagchi said: “Together we have built one of India’s most valuable companies. It has been a privilege to serve this great institution”.
Ravanan, 44, is a member of Institute of Chartered Accountants of India, Institute of Company Secretaries of India and alumni of Harvard Business School. “I am honoured and humbled at being named to lead one of the most valuable and respected IT services companies. It will be my endeavour to build further on this legacy and take the organization to greater heights on the strength of a stellar leadership team,” Rostow said.
“Mindtree is on a strong footing today to explore newer opportunities that take us to a different orbit in the years ahead. I would be focusing my energies towards making Mindtree a significant global player by the year 2020,” Krishnakumar said.
MindTree acquires US firm
MindTree on Monday announced the acquisition of US-based software services firm Magnet 360 in an all cash deal. The deal, valued at $50 million (about Rs 335 crore), includes an upfront payment of $37 million and additional payouts of up to $13 million over the next two years.
The Bengaluru-based company’s board of directors which met here to take on record the third quarter results announced that the RBI approval required under FEMA regulations has been obtained already. The acquisition will be completed by end of March 2016. The acquisition is aimed at strengthening MindTree’s digital and cloud services offerings, the company said in a statement.
Magnet 360 is based in Minneapolis, US with offices in New York, Chicago and Los Angeles. It reported $25 million in revenues for year 2015.
Meanwhile, MindTree reported a 7.2% year on year growth in net profit at Rs 151 crore for the third quarter ended December. However, on a sequential basis, the net profit has seen a decline of 4.6%. The revenue during the quarter grew 33.2% year on year at Rs 1,214.5 crore and sequentially at 3.9%.
“We saw good revenue growth in Q3 as we continue to strike the right chord with our clients. This broad-based result reflects the ongoing momentum of our key focus areas such as digital and managed services. Those initiatives
combined with our recent acquisitions and deal wins are creating a clear path to further our growth trajectory,” Krishnakumar Natarajan, CEO & managing director, MindTree said.
The Board of Directors also recommended an issue of bonus shares in the ratio of 1:1 (one additional equity share for every existing equity share). This is subject to shareholders approval. This is the second bonus shares issue in the last two years. The Board recommended an interim dividend of 40% (Rs 4 per equity share of par value of Rs 10 each) for the quarter ended December 31, 2015.
The company’s shares closed the day’s trading 4.51% lower at Rs 1,469.60 on BSE.