Daijiworld Media Network - Bengaluru

Bengaluru, Sep 1: Happiest Minds Technologies said its merger with ITC Infotech will help the combined company target larger deals and expand its capabilities as artificial intelligence (AI) reshapes the technology services industry and customers increasingly focus on outcomes and vendor consolidation.

Happiest Minds has strengths in digital engineering, cybersecurity, AI and data, while ITC Infotech brings expertise in SAP, enterprise applications, Industry 4.0 and other end-to-end services. The combined capabilities are expected to improve the company's ability to compete for larger contracts.

"I do expect we'll see a little bit more of this where there are synergies to be had and that will strengthen the merged entity's ability to play in the market," Happiest Minds co-chairman and CEO Joseph Anantharaju said during a media briefing.

He said Happiest Minds had previously lost potential business when customers requiring enterprise applications, ERP systems or SAP services chose other providers after the company had helped them develop digital capabilities.

Happiest Minds is merging with ITC Infotech in a Rs 1,330-crore deal, with ITC emerging as the promoter of the merged entity with an approximately 73.4 per cent stake.

Pravin Bhadada, managing director and CEO of management consulting firm Neovay Global, said both companies had grown reasonably well over the past five years but continued to face pressure from changing macroeconomic conditions, vendor consolidation and AI-led disruption.

The merger will create a sizeable technology services platform that can compete more aggressively in global markets, he said.

Indian IT services companies have increasingly turned to acquisitions amid slowing revenue growth, with deals offering a route to maintain steadier growth. TCS, Infosys, HCLTech, Coforge and Persistent are among major companies that have acquired smaller firms in recent times.

Happiest Minds managing director Venkatraman Narayanan said investments would be required to build capabilities in emerging areas. Services companies will increasingly need to offer solutions or product platforms, requiring greater scale, market reach and the ability to absorb investments through higher revenues, he said.

Anantharaju and Narayanan said they will continue with the merged company following completion of the transaction.