Mumbai (Maharashtra) [India], May 22 (ANI): Mindtree’s recently announced acquisition of Nxt Digital business of Larsen & Toubro is credit neutral for the company, India Ratings and Research (Ind-Ra) has said.
The agency believes that Mindtree’s consistent positive free cash flow generation over the last four years and strong cash and equivalents (end-FY21: Rs 2,690 crore) can comfortably meet the cash consideration of Rs 198 crore for the acquisition.
Ind-Ra said Mindtree’s overall financial credit profile will remain strong, even after completion of the transaction by July 31.
Besides, Mindtree intends to utilise NxT Digital’s business competencies across different industry segments to bring strong operational efficiencies, digitise the manufacturing and engineering value chain, and offer a unique experience to its customers.
The company intends to enhance its cloud-based Internet of Things capabilities and gain opportunities in the Industry 4.0 space with the given acquisition and offer a complete end-to-end digital transformation solution to its customers.
Ind-Ra has already factored into Mindtree’s L&T’s continued expected financial and operational support. The agency upgraded Mindtree’s rating to AAA from AA-plus in March based on the agency’s expectation of an improvement in its business and financial profile. (ANI)
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