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Sonata Software to acquire Texas-based Quant Systems

Sonata Software’s largest ever acquisition will contribute 1/6th or 16.67 percent of the company’s overall revenue going forward, according to MD & CEO Samir Dhir.

In an interaction with CNBC-TV18, Dhir mentioned that the market trends are still pretty optimistic.

Sonata Software North America Inc., a wholly-owned subsidiary of modernisation and digital engineering company Sonata Software Ltd. signed a definitive agreement to acquire 100 percent stake in Texas-based Quant Systems Inc., in what it calls the biggest-ever acquisition in the company’s history.

The company will make an upfront payment of $65 million in cash for the deal, post which, there would be deferred achievement-based payouts up to a maximum of $95 million, payable over a two-year period. There will also be certain additional payments on achievement of additional targets.

Incorporated in 2008, Quant Systems is an enterprise data analytics and cloud modernisation service provider for leading Fortune 500 clients. The company and its subsidiaries have presence in the US, Costa Rica as well as India.

Calling Quant a growth acquisition for Sonata, Dhir said that it will give Sonata an entry into Banking & Financial, along with Healthcare Services segment.

Quant Systems has reported revenue of $8 million in 2020, $25 million in 2021 and $37 million in 2022. It has a team of over 300 engineers in delivery centers across India and Costa Rica, along with onshore presence in North America. Some of its leading partners include Amazon Web Service, Adobe, Salesforce, Snowflake, and Google Cloud.

The acquisition of Quant Systems will also add two large clients to Sonata’s top five clients list and is margin accretive as well.

Funding for the acquisition will be done via internal accruals and the company will also take some short-term loans for the same. Dhir expects to to repay the short-term loans of 1-2 years soon.

Quant’s acquisition will also accelerate Sonata’s capabilities in enterprise data analytics, cloud modernisation, cyber security, data privacy and other areas.

The deal is expected to close within 30 days, subject to completion of customary closing conditions.

Shares of Sonata Software are trading 4.7 percent higher at Rs 722.90. CNBCTV18

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