Cyient (532175) investor relations material

Deal rationale and strategic fit

• Acquisition positions the company to address a $2 trillion market by expanding from engineering to lifecycle and AI-driven solutions, supporting digital transformation and data-readiness for clients.

• Aligns with a pivot toward lifecycle engineering, supporting customers' 3–5 year growth plans in sectors like Aerospace, Energy, MedTech, Automotive, Hi-Tech, and HealthTech, and increases North American customer footprint.

• Combines deep domain expertise with advanced AI and data engineering, strengthening the Intelligent Engineering proposition and closing critical capability gaps.

• Enables shift from project-based to multi-year, outcome-based commercial models, supporting predictable, annuity-style growth and participation in large, annuity-led tech/data programs.

• Customer feedback and market signals confirm demand for expanded digital and AI capabilities.

Financial terms and conditions

• Deal valued at $218 million, with $130 million (about 60%) paid upfront and the remainder as earn-outs over two years, based on EBITDA growth and performance.

• All-cash transaction, primarily funded through debt serviced by the acquired asset's free cash flow.

• EPS accretive and ROCE positive after integration costs, with full accretion expected in 1.5 years.

• Earn-out includes synergy EBITDA management incentives and retention schemes.

• Transaction is subject to customary regulatory approvals and closing conditions, expected to close by Q2 FY27.

Synergies and expected cost savings

• Cross-sell and upsell opportunities into the existing customer base are expected to drive significant momentum from year two onward.

• Integration of AI, data, and product engineering enables enterprise-grade AI adoption and platform modernization.

• Synergy targets are built into management incentives but are conservatively modeled for initial years.

• Tao Digital strengthens both upstream engineering and downstream AI application delivery, enabling end-to-end AI solutions at scale.

• Clients benefit from accelerated outcomes and sustained competitive advantage through robust data foundations.