Country’s largest IT services firm Tata Consultancy Services (TCS) made its largest buyout since going public in 2004. They are set to acquire technology consulting firm Coastal Cloud for $700 million in cash.
The buyout is important because it comes less than three months after India’s largest IT services company announced a plan to invest $6.5 billion over six years to build 1GW of data centre capacity. This shows the firm is trying to expand into new business areas.
Last month, the US private equity firm TPG agreed to invest $1 billion to buy a 49% stake in the company’s data centre business.
What TCS said
“This acquisition marks a pivotal milestone in advancing our global Salesforce capabilities and accelerating our AI-led transformation agenda,” said chief operating officer Aarthi Subramanian. “It is another significant step towards realising TCS’s vision of becoming the world’s largest AI-led technology services company.”
When will the deal be closed?
TCS expects to close the acquisitions by 31 January. Reports suggest that the company has enough cash to fund this large acquisition: Last year, it generated over $5.1 billion in free cash flow from operations.
TCS’ largest acquisition
TCS made its biggest acquisition in 2008 when it bought Citigroup Global Services Ltd for $505 million.
Its new buyout is the second one in less than two months. In October, TCS also bought ListEngage MidCo, a US digital marketing services company, for $73 million.
About the AI firm – Coastal Cloud
Coastal Cloud reported $132 million in revenue in 2024, according to a press release. The company was founded in 2012 and helps businesses improve their operations by providing solutions and experts trained in Salesforce. It had 400 employees at the end of September 2025.
TCS
TCS earned $30.2 billion in revenue. The company has been finding it hard to grow after K. Krithivasan became CEO on 1 June 2023. Krithivasan was appointed after the previous CEO, Rajesh Gopinathan, suddenly resigned in March 2023. There are also reports that analysts at Motilal Oswal predict TCS’s revenue will fall for the full year. This has never happened in the more than 20 years since the company went public.
