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New York-based Synechron reaches out to NTT, Cognizant for takeover

IT company Synechron Technologies which is valued at $1.2-1.3 billion, is on the block with Cognizant and NTT among the global companies approached for a takeover. However, Synechron founders have denied looking to cash out saying many competitors...

, ET Bureau|
Updated: Nov 19, 2019, 11.10 AM IST
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Mumbai: Bootstrapped Synechron Technologies is on the block, with Cognizant and NTT among the global companies approached for a takeover, multiple people aware of the development told ET. The founders are reportedly exiting, they said.

The financial services-focused IT company based in New York is valued $1.2-1.3 billion, bankers aware of the exercise said. Morgan Stanley has been mandated as an adviser.

Synechron founders Tanveer Saulat, Faisal Husain and Zia Bhutta denied they are looking to cash out. “Synechron, due to its niche services for the financial services industry, lured investors and our competitors to approach us multiple times for a buyout, but our founders have always refrained,” a Synechron spokesperson said in an emailed response. “We have had discussions with private equity investors but decided against a transaction.”

Synechron Technologies Pvt Ltd was established in 2001, and is a subsidiary of privately owned Synechron Holdings Inc, British Virgin Islands. It has a presence in more than 18 locations in India and globally.

The company earns around $500 million in revenues annually and around $60-70 million in EBITDA. It has steadily grown organically as well as inorganically. It has acquired a series of smaller IT firms in the US and Europe.

The founders own 25-27% each in Synechron, while the management and other smaller companies that have come into the fold own the remaining stake.

A spokesperson for Cognizant declined comment. NTT did not respond to email queries.

“IT companies want to expand BFSI segment as that is resilient to most economic cycles and has been growing steadily over decades,” said an investment banker advising technology companies.

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