It's official! Tech Mahindra has acquired a 51% stake on a fully diluted basis in Comviva Technologies, a Bharti Group Company, and a provider of mobile Value Added Services (VAS), Mobile Money and Mobile Payment solutions, for a value of Rs 260 crore. The deal will be subject to regulatory approvals, and the company will be rechristened as Mahindra Comviva. As part of this arrangement, Tech Mahindra will make an upfront payment of Rs 125 crore towards the stake acquired and the balance amount of Rs 135 crore will be paid out over a period of five years based, on Comviva achieving mutually agreed performance targets. The current promoters will continue to hold a 20% stake on a fully diluted basis in Comviva, post the closure of the deal. As of March 2009, Bharti Enterprises owned 75.03% in the company, however reports suggest that Sunil Mittal and family currently own 50% stake in the company through various trusts and holding firms, while the company's investors like Sequoia Capital and Cisco own 30% and 5% stake respectively with the rest 15% stake owned by Comviva employees. Earlier, there were reports that Tech Mahindra was looking to acquire the company for Rs 750 crore, but both Tech Mahindra and the Bharti spokespersons refused to comment on the development, saying it was a market speculation. Mutual benefit, what happens to CanvasM?: According to a statement from the company, the acquisition will significantly enhance Tech Mahindra’s capabilities in the mobile VAS domain and will provide access to a large client base, enabling cross-selling opportunities. It is inline…
