LTI reopens M&A playbook to expand in digital engineering

When LTI acquired digital engineering firm Cuelogic Technologies on June 16, it was the technology consulting company’s first acquisition in 20 months. 

“We believe rapid productisation is an essential requirement for accelerated digitalisation across industries,” said Sanjay Jalona, CEO and Managing Director of LTI, in a press statement last week. Cuelogic’s tools and methodologies, he added, will help LTI’s clients launch products faster, innovate, and maintain products optimally.

LTI, which clocked $1.7 billion in the 2021 fiscal, had clocked four acquisitions in 2019. Since then, its management focused on operations to deal with the COVID-19 pandemic while integrating the buyouts and chasing large deals. LTI (erstwhile Larsen & Toubro Infotech) has 35,991 employees, as of 31 March 2021.

A couple of LTI’s buyouts have begun to bear fruit

LTI acquired Syncordis in December 2017 and Nielsen+Partner in February 2019. Both these firms gave LTI a foothold in the banking and financial services (BFS) industry, particularly into the Temenos ecosystem of enterprise customers. Switzerland-headquartered Temenos develops enterprise software for BFS clients, and is strong in the Nordics region of Continental Europe. 

In the past financial quarter, LTI won a two-year $45 million digital transformation deal with one of the largest Islamic banks, warding off competition from larger IT companies from India. “This win is a playbook example of how we leverage acquisitions to enhance our capabilities and drive growth,” Jalona told equity analysts on May 5, 2021.

“We acquired two assets, and now we are the second largest player in the Temenos ecosystem,” Sudhir Chaturvedi, President (Sales) of LTI, reiterated in the same earnings call. LTI has released a Temenos-based SaaS offering for the Nordics market, apart from winning significant deals in Europe and Asia Pacific.

So what does Cuelogic bring to the table for LTI?

Since the pandemic began, every industry has had to reimagine its operating models to survive and stay relevant, Jalona noted in the earnings call. “The lines between B2B and B2C have blurred, with several B2B organisations facing the need to explore new routes to market and sell directly to their consumers during the pandemic,” he explained.

Several clients in manufacturing and consumer packaged goods are trying to reach their customers directly for the first time, he said. “Most of these organisations are either building or speeding up their B2C capabilities,” Jalona told equity analysts.

With Cuelogic’s client roster and a pipeline of 100 products, LTI can deepen its expertise in UX and AI consulting, DevOps, and IoT. This will be crucial for LTI’s ability in helping its clients digitise their offerings.

Cuelogic was founded in 2008 by Nikhil Ambekar, CEO, Vikrant Labde, CTO, and Neel Vartikar, its Chief Customer Officer. “When Vikrant, Neel and I founded Cuelogic, our goal was to bring rapid and reliable product development services to enterprises, and help them scale their digital transformation,” Ambekar said.

Cuelogic’s 300 employees will get integrated with LTI’s digital practice, stated the LTI statement.