Industry Odisha Bureau, Oct 21: Indian IT companies are hunting US and European AI targets to supplement organic growth. Buyers want specialist talent and new clients, but valuations face sharper scrutiny.
Indian IT services and software-as-a-service (SaaS) firms are scouting for overseas acquisition targets. They want businesses with $20 million to $60 million in annual revenue. The hunt spans the US, the UK and Western Europe, Mint reported. Some deals valued at $100 million to $200 million are also under way, experts said. The first figure measures a target’s yearly sales; the second, its price.
London-based Datatonic, a cloud data and AI consultancy, is weighing a stake sale. Both minority and majority options are being explored, one person said. Top Indian IT firms are among interested international buyers, two people said. Talks remain preliminary.
Singapore’s Mystifly, a platform-as-a-service company, has also drawn interest. A deal could value it at over $100 million, two other people said. No final decision has been made on either transaction. Neither company responded to Mint’s queries.
The interest follows a broader wave of technology services buyouts. Tata Consultancy Services bought Coastal Cloud for $700 million in December, its largest-ever deal. Infosys completed its purchase of Optimum Healthcare IT for up to $465 million in May.
Indian firms want acquisitions to supplement organic growth, which has structurally slowed. Buying an established company brings clients, specialist talent and ready-made capabilities. It is faster than building data engineering, analytics and AI skills in-house. It can also strengthen consulting arms for larger contracts. That matters as uncertainty, AI disruption and geopolitics weigh on discretionary tech spending.
Sonia Dasgupta of JM Financial sees a clear pick-up in outbound deals. She said the focus has shifted decisively towards data, AI and engineering.
Abhishek, a PwC India partner who uses one name, cited new accounts and premium capabilities. Access to global capability centres also attracts buyers, he said. He expects such deals to pick up over the next two to four quarters. Quality assets, however, remain scarce, he added.
Shivani Nagpaul of EY India describes a two-speed market. Well-funded buyers chase large deals for scale and marquee clients. Others pursue smaller specialist targets across the US, UK and Europe. She said deals increasingly buy a seat at large, multi-year transformation programmes.
Buyers are also tougher on price. AI capabilities alone no longer command premium valuations, Nagpaul said. Buyers want commercial traction, strong enterprise ties and growth beyond headcount-led delivery. Traditional IT services earn revenue largely by deploying more staff.
Dasgupta expects healthcare, financial services, data and cybersecurity to keep commanding premiums. She said AI worries may delay some deals but not materially change multiples.
Interest flows both ways. Global buyers are eyeing India’s delivery scale, AI-led platforms and domain expertise, Dasgupta said.
Ultimately, an acquisition succeeds only if specialist skills translate into lasting revenue. Capability may open doors; commercial performance keeps them open.
