Persistent acquires Software Corporation International

Digital engineering firm Persistent Systems will acquire Software Corporation International (SCI) for $53 million, according to a stock exchange filed by the company on Wednesday.

SCI operates in the payments industry, and is headquartered in North Carolina, the US. It generated revenue of $17 million in 2020 from consulting services with respect to products like check processing systems, corporate payments, and digital payments, including Zelle and The Clearing House RTP network in the US.

The acquisition includes an SCI affiliate called Fusion360, which was incorporated in 2011. It supports SCI's consulting services in application development, maintenance, and support services for leading payment platforms.

"With the addition of SCI and Fusion360, we are forming a new payments business unit, and expanding our BFSI expertise as well as client portfolio," said Sandeep Kalra, CEO and Executive Director of Persistent Systems, in the exchange filing.

Persistent Systems has made an upfront payment of $34.45 million to SCI shareholders, subject to customary adjustments for working capital, debt and cash on closing.

The SCI shareholders will be eligible for up to $5.96 million per annum over the next two years, subject to meeting certain performance thresholds. Finally, key employees and SCI consultants are eligible for an aggregate amount of $2.21 million per annum after each of the next three years.

"Combining our deep payments knowledge with Persistent’s digital engineering, next-gen cloud services and global footprint allows us to deliver immediate value to any payments modernisation initiative,” said D Keith Sides, CEO of SCI.

SCI and Fusion360 have integrated business operations with its expertise in payments solutions, integration, and support services for a portfolio of leading North American banks.

Further, Fusion360 provides application development, maintenance, and support for leading payment platforms, including IBM’s Financial Transaction Manager, which can be leveraged by Persistent Systems.

In a separate deal, Persistent Systems acquired Shree Partners and its Indian development centre in the National Capital Region for $6.87 million. It provides data management and analytics, IT infrastructure management and support services to companies based predominantly out of the US.

"The acquisition provides strategic benefits by enabling Persistent to deliver critical services to a strategic client, which is a leader in the global claims management industry," according to the exchange filing from Persistent Systems. "Shree’s expertise also expands Persistent’s BFSI footprint in the cloud, data, and infrastructure domains," it added.

“We look forward to bringing our cloud, infrastructure, security and AI capabilities to many new organisations looking to accelerate their digital transformation,” said Rajiv Dahiya, CEO of Shree Partners.

The BFSI segment contributes nearly 50 percent to Pune-headquartered Persistent Systems' revenue. “Our acquisitions would be to do tuck-ins either to make us more smarter, sharper and some others service lines that we have or to go deeper in an industry vertical, whether it is BFSI or healthcare or in a geography like Europe,” Kalra said during the earnings call at the end of the June 2021 quarter.