Sensex, Nifty open mildly higher
Bank of America Merrill Lynch says acquisition of US-based CJS Group provides Tech Mahindra with an entry in the healthcare vertical. Business exposure of CJS is mainly to clients in US & UK.
Acquisition transaction is likely to be mildly earnings accretive and deal valuation at USD 110 million appears to be in-line with industry trend, the brokerage house feels.
Tech Mahindra is likely to use existing cash for CJS' acquisition. BoAML sees a contingent mull of USD 130.5 million based on 2017-19 revenue and EBITDA targets.
The brokerage house has maintained underperform rating on sensitivity w.r.t H-1B visa program in the US. Every 10 % increase in H-1B wages may hurt earnings by 11 %, on gross basis, BoAML feels.
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