Cyient Limited has finalized a definitive agreement to acquire 100% of the equity share capital of Tao Digital Solutions Inc. for an enterprise value of US$218 million. The transaction is scheduled for completion on or before September 30, 2026. This strategic move aims to bolster Cyient's Intelligent Engineering proposition by integrating Tao Digital's strengths in AI-native data and lifecycle engineering capabilities, positioning the combined entity for larger markets and annuity-led deals. Tao Digital has demonstrated strong profitability, achieving over 20% EBITDA margin. Cyient anticipates moderate single-digit growth in FY27 with acquisitions included. The company held an investor conference call on June 01, 2026, to discuss the acquisition details, the presentation for which is now available on its website.

Acquisition Details

The total consideration is structured as an all-cash deal, comprising an upfront payment of US$130 million and two earnout tranches spread over two years post-closing. The upfront amount represents approximately 60% of the total value and about 7.9x the CY25 EBITDA of Tao Digital. The earnouts are linked to EBITDA growth and synergy delivery. Cyient will fund the acquisition primarily through debt, with a significant portion to be serviced by the free cash flows of the acquired asset. Tao Digital will become a wholly-owned subsidiary of Cyient Ltd.

Strategic Rationale and Financials

Tao Digital brings synergistic capabilities in AI and Data Engineering and Digital and Product Engineering. The acquisition addresses critical capability gaps in an AI-led market shift, enabling Cyient to move from small, project-based revenues to large, multi-year, multi-tower deals with outcome-based commercial models. The combined capabilities will allow Cyient to service the entire product value chain, driving a shift from the ER&D Outsourcing market to an estimated US$2 Trillion Total Addressable Market.

Tao Digital has demonstrated strong revenue growth, reaching US$80 million in CY25 revenue. Headquartered in Santa Clara, CA, the firm operates with a workforce of approximately 3,500 employees across eight delivery centres.

Tao Digital generates over 80% of its revenues from data engineering and software product engineering, with a diversified revenue base focused majorly on the Americas (70%). The Automotive, Hi-tech, and Healthcare verticals contribute to over 90% of its revenues. As part of the transaction, Cyient will also acquire group entities listed in Annexure A of the regulatory filing, including subsidiaries in Canada, India, Taiwan, Greece, Germany, the Czech Republic, and Australia. The deal was intimated to the stock exchanges on May 30, 2026, under Regulation 30 of the SEBI (LODR) Regulations, 2015.

Cyient's promoter group has confirmed that it has not created any encumbrance on the company's shares as of March 31, 2026, other than those already disclosed to the stock exchanges. This declaration was submitted in compliance with Regulation 31(4) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

The confirmation was provided by Krishna Bodanapu on behalf of the promoter and promoter group. The disclosure ensures transparency regarding the holding status of the promoters for the financial year ended March 31, 2026.

The following table details the filing information:

Ravi Kumar Nukala, Dy. Company Secretary of Cyient , submitted the compliance letter to the exchanges. The declaration explicitly states that no direct or indirect encumbrance has been made on the shares by the promoters during the specified period.