Cyient Acquires An Onshore Mining Consulting Unit in Australia
Cyient is to acquire Melbourne-based Integrated Global Partners (IG Partners) for AUD 12m in cash (USD 9m) + earn-outs. IG Partners is a mining business and organizational consulting firm. The company has a specialty in enterprise asset management. It had in FY20 revenues of AUD 15m (USD 11m) and a headcount of 40.
We think Cyient is buying a consulting front-end to provide early access in the decision lifecycle and cross-sell enterprise asset management services, e.g., IoT use cases such as predictive maintenance.
Cyient resumes here its M&A activity after a two-year pause and the acquisition of AnSem, a semi-conductor engineering specialist headquartered in Leuven, Belgium. The company is making a counter-cycle acquisition, with the Australian mining industry going through a significant slowdown after a booming decade. Cyient is in Australia for the long-term and is ready to go through short-term market turbulences, we think. Still, the timing is odd. Cyient has disappointed in the past six quarters with its low growth and is exposed to declining revenues in the aerospace industry. We would have expected Cyient to buy short-term growth, rather than a long-term strategic asset.