Tata Group-Backed IT Company to Acquire 100% of Coastal Cloud for up to USD 700 Million
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The stock is up by 12 per cent from its 52-week low of Rs 2,867.55 per share.
The Board of Directors of Tata Consultancy Services (TCS) has approved the acquisition of Coastal Cloud Holdings, LLC and its subsidiaries. This transaction involves TCS's wholly-owned US subsidiary, ListEngage MidCo, LLC, executing a Securities Purchase Agreement and Plan of Merger. Coastal Cloud is a Salesforce Summit Partner, offering specialised consulting, implementation, and managed services across multiple Salesforce clouds, alongside strong expertise in Data and AI solutions like Salesforce Data Cloud and Mulesoft. The target entity's consolidated turnover was USD 132 million for the fiscal year ending December 2024. The acquisition is for a cash consideration with an Enterprise Value of up to USD 700 million, and it is expected to be completed by January 31, 2026, subject to Hart-Scott-Rodino antitrust (HSR) approval in the USA.
Coastal Cloud, founded in December 2012 and based in Florida, USA, is recognised as one of the largest "pure-play" Salesforce partners. It brings nearly 400 Salesforce-skilled professionals and a robust client roster, including a significant presence in the mid-market segment. Its core business is in Advisory and AI services, IT, and IT Enabled Services. The company's turnover has shown consistent growth over the last three years, from USD 114 million in FY22 to USD 132 million in FY24, reflecting a strong growth and profitability profile.
The acquisition is strategically significant as Coastal Cloud's strong advisory capabilities, multi-cloud offerings, and AI/Agentforce expertise will enable TCS to deepen its presence in the US mid-market and accelerate its growth in the Salesforce ecosystem. For Coastal Cloud, the merger will provide access to TCS's vast customer base and its unique capability to build and provide the necessary scale to support further accelerated growth.
About the Company
Tata Consultancy Services is the flagship company and a part of the Tata group. It is an IT services, consulting and business solutions organisation that has been partnering with many of the world's largest businesses in their transformation journeys for over 50 years. TCS offers a consulting-led, cognitive-powered, integrated portfolio of business, technology and engineering services and solutions.
The company has a market cap of over Rs 11 lakh crore and has been maintaining a healthy dividend payout of 84 per cent. The company has a good return on equity (ROE) track record: 3 Years ROE 50.3 per cent. The stock is up by 12 per cent from its 52-week low of Rs 2,867.55 per share.
Disclaimer: The article is for informational purposes only and not investment advice.