Mahindra: On a long drive

Mumbai, Feb. 9: Mahindra and Mahindra has decided to acquire a majority stake in Bristlecone Inc, a California-based IT services and solutions company.

The automobile major will invest $7 million (Rs 31.5 crore) in Bristlecone, but will not buy out any of its existing shares.

The Mahindra group will also consolidate five of its existing subsidiaries — Mahindra Consulting Ltd, Mahindra Consulting Singapore (Pte) Ltd, Mahindra Consulting GmbH, US-based Mahindra Consulting Inc and Mahindra Intertrade (UK) Ltd — and Bristlecone into an overseas entity called Bristlecone Ltd.

The merged entity will have a topline of over $22 million, with the Mahindra group holding a 60 per cent stake in the company. The remaining will be held by Padman Ramankutty, the current CEO of Bristlecone, and other founders apart from the employees who have participated in the stock option scheme.

The merger is expected to bring in vast synergies to the group and Bristlecone’s brand equity will provide a strong catalyst for growth in the US market.

Ulhas Yargop, who is M&M president for telecom and software sector, said, “This acquisition is the first investment of its kind for the Mahindra group. This is in line with our strategy to aggressively expand our presence in the US market. We believe, this is a strong affirmation of our strategy to focus on high-end IT consulting opportunities.”

Anand Mahindra will be the chairman of the new entity. Anjanikumar Choudhari, current executive vice-president in M&M, will be the executive vice-chairman and Ramankutty will be the president and CEO.

Ramankutty said the supply chain management (SCM) market shrank by 6 per cent in 2002. However, it is expected to grow at the rate of 8 per cent in the next five years. The growth areas, he added, would be supply chain planning and transportation management.

Bristlecone offers enterprise solutions, supply chain management and managed services with a focus on manufacturing and supply chains. It has expertise in verticals like the apparel and footwear, semiconductor, consumer goods and oil and gas sectors. It is an implementation and integration partner for SAP applications.

Bristlecone plans to become a full service outfit offering expertise in business process consulting across all aspects of enterprise life cycle.