Continuing its string of reorganisation measures, Tech Mahindra announced the merger plan between its two wholly-owned consulting subsidiaries – Mad*Pow Media Solutions LLC (MadPow) and Born Group Inc. (Born).
The fifth largest Indian IT service company, in a filing with BSE, said, “The business of both entities Mad*Pow and Born, are complimentary, hence consolidation of entities will result in synergy of business operations, optimize operational cost and reduce the compliance risk.”
The merger is considered a related party transaction as both Mad*Pow and Born are wholly owned step-down subsidiaries of the IT company.
In 2019, Tech Mahindra announced acquisition of significant stake in design consultancy firm Mad*Pow that is headquartered in US. At that time, the company revealed that it was paying $70 million to acquire 65% stake in the firm.
Born Group is the largest independent, integrated agency for strategy, creative content and commerce offerings with strong technology capabilities in US.
The IT company said that the revenue of Mad*Pow and Born for the fiscal year 2023 was $12.10 million and $55.08 million, respectively. As a result of this merger, there will be no issuance of new shares as both Mad*Pow and Born are already wholly owned by Tech Mahindra (Americas) Inc.
The company added that the the integration of these two companies is expected to bring about synergies in their business operations, streamlining their activities and enhancing their ability to serve a diverse clientele effectively.
The IT company recently announced consolidating its business down to six core strategic business units. “We have got Americas unit which has got three business units. In Europe, we have consolidated telecom and non-telecom business into single strategic business unit. And we have consolidated our Asia Pacific and Japan businesses under a single leader, who will be based in Australia”, said Mohit Joshi, MD and CEO designate, Tech Mahindra.
The merger is considered a related party transaction as both Mad*Pow and Born are wholly owned step-down subsidiaries of the IT company
Tech Mahindra said that the the integration of these two companies is expected to bring about synergies in their business operations