IT services major Tech Mahindra on Friday said it will acquire 70 per cent stake in Bengaluru-based Cerium Systems at an enterprise value of up to Rs 245 crore.

The acquisition will boost Tech Mahindra's Engineering Services practice in VLSI (Very Large Scale Integration) and Embedded Software, Tech Mahindra said in a statement.

"We continue to invest in niche digital assets complementing our service offerings. Cerium provides cutting edge solutions with a strong foothold in global semiconductor industry," Tech Mahindra Head of Corporate Development and Portfolio Companies Vivek Agarwal said.

In a regulatory filing, Tech Mahindra said 70 per cent of the shares will be acquired upfront for an enterprise value not exceeding Rs 245 crore and the remaining 30 per cent will be acquired over the next two years at a valuation linked to the financial performance of the company.

The cash transaction is expected to close by April 1, 2020, it added.

"This acquisition is expected to help bolster capabilities in the areas of semiconductor design and testing, embedded software development/testing and product engineering," the filing said.

Founded in 2013, Cerium is an integrated circuit and embedded software design service provider, and has around 840 employees.

It has offices in Vishakhapatnam, Cochin, Santa Clara (US) and Penang (Malaysia). Its revenue stood at Rs 105.7 crore for the financial year ended March 31, 2019. PTI SR

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