Sonata Software shares jump 7% on acquiring U.S.-based Quant Systems

Shares of Sonata Software rallied nearly 7% in intraday trade on Thursday after the IT services company signed a deal to acquire 100% stake in Quant Systems Inc. in an all-cash deal of $65 million. As per the company, this is the biggest-ever acquisition in Sonata Software’s history, which will boost its capabilities in modernisation and digital engineering space. Quant Systems is a Texas (USA) based enterprise data analytics and cloud modernisation company.

As per the deal, the company will make an upfront payment of $65 million, while it would also pay up to $95 million over the next 2 years for achievement-based earn-outs.

Boosted by the deal, shares of Sonata Software snapped two sessions losing streak and opened a tad higher at ₹693.55 against the previous closing price of ₹690.20 on the BSE. During the session, the IT stock climbed as much as 6.95% to ₹738, while the market capitalisation rose to ₹10,165 crore. The counter touched its 52-week high of ₹753 on February 20, 2023, while it hit a 52-week low of ₹457.50 on June 20, 2022. The midcap stock has delivered consistent returns throughout the year, rising 33% in the last 12 months, 39% in six-month period, and 22% in a month.

In a late night filing on Wednesday, the Bengaluru-based IT company said that Sonata Software North America Inc., (SSNA), its wholly owned subsidiary, has signed a definitive agreement with the shareholders of Quant Systems to acquire the firm. The acquisition is expected to be closed within 30 days subject to completion of customary closing conditions.

“This acquisition is in line with Sonata’s strategy to accelerate the growth curve and build scale. It will accelerate Sonata’s capabilities in Enterprise Data Analytics, Cloud modernisation, Cyber security, Salesforce, Data Privacy, Adobe, and Digital & Mobile App solutions, including differentiated IPs for Salesforce (workbox.io) and Chatbot (Lisa) technologies,” it said in a BSE filing.

The release further said that the company will expand its domain expertise in banking and financial services, healthcare & life sciences, consumer/retail, and others.

“We aim to be the fastest-growing next-gen Digital firm delivering modernisation & digital outcomes for enterprises through our platformation framework. To achieve this vision, we have outlined some key strategic drivers to build scale through service offering expansion in modernisation, invest in BFSI and healthcare & life sciences verticals, and build global centres,” said Samir Dhir, MD & CEO, Sonata Software.

“Quant Systems aligns to our strategic drivers and will enable us to win larger deals in our focus-verticals and adds two large clients to our top 5 clients list,” he added.

Founded in 2008, Quant Systems has a team of over 300 engineers in delivery centres across India (Hyderabad) and Costa Rica along with Onshore presence in North America to deliver client service. Quant has presence in BFSI, Healthcare & Life Sciences and Consumer & Retail. It has built a strong partner ecosystem of industry leading players including, AWS, Adobe, Salesforce, Snowflake, and Google Cloud.