Tech Mahindra to acquire fintech startup Payments Technology Services for $9M
IT services major Tech Mahindra on Tuesday said it will acquire Payments Technology Services Ltd (PTSL), a step-down subsidiary of fintech firm FIS, for $9 million (about Rs 66 crore).
The acquisition will give Tech Mahindra access to IPs and licenses for two products - Open Payment Framework (OPF) and Multi-Bank System (MBS), a regulatory filing said.
"The acquired capabilities in the payments space will give us access to IPs and licenses for two products, which is consistent with our strategy of pivoting the business towards product and platform implementations and participating in the banking transformation programmes," Tech Mahindra added.
This acquisition will open up other opportunities for Tech Mahindra as a larger partner with FIS across a number of areas, it said.
The cost of acquisition is $9 million and the transaction is expected to close by March 31, 2021, the filing added.
Established in March 2007, PTSL is a payments solutions provider with a focus on banking and financial Services (BFS). The company is headquartered in Hong Kong and has approximately 109 employees. Its turnover for the financial year ended December 31, 2019 was $5.4 million.
In a statement, Tech Mahindra said it has inked a professional services agreement with FIS to scale its enterprise payments and banking capabilities.
"This agreement aligns with Tech Mahindra's strategy to expand its BFSI (banking, financial services and insurance) footprint globally. In support of this strategy, Tech Mahindra will also build a state-of-the-art Centre of Excellence (CoE) in Chennai, India," it added.
Vivek Agarwal, Head Corporate Development and Global Head for Financial Services and Healthcare at Tech Mahindra, said, BFSI is one of the fastest-growing industry segments for Tech Mahindra and the company now has a strong presence across key regions including North America, Europe, and Asia Pacific.
"This move is in line with our TechMNxt charter and is aimed at strengthening our global payments capabilities, and offer clients end-to-end payments transformation services and expand this expertise to core banking and digital," he added.