Benzinga | Oct 1, 2020 07:14AM EDT

Mastech Digital Acquires AmberLeaf For $14M

Transaction Highlights:

* AmberLeaf will increase scale and add complementary capabilities to the Company's Data and Analytics business segment, branded as Mastech InfoTrellis;

* The acquisition will strengthen and provide additional scope from which to implement Mastech InfoTrellis' Enterprise Intelligence Hub strategy; and

* The combined businesses will provide customers with an expanded suite of service offerings, delivery capabilities, and human capital across North America, EMEA, India and ASEAN countries.

Mastech Digital, Inc. (NYSE:MHH), a leading provider of Digital Transformation IT Services, today announced the acquisition of AmberLeaf Partners, Inc., a Chicago-based customer experience consulting company. The acquisition will bring together two distinct brands, one that architects and delivers enterprise intelligence through data and analytics, and the other that provides experience consulting through the customer lifecycle.

AmberLeaf is a uniquely positioned organization that offers managed services for a variety of Cloud-based enterprise applications across sales, marketing, and customer service throughthe AmberLeaf Experience as a Service(AXaaS). The acquisition will provide a broader scope for AXaaS across Mastech InfoTrellis's global client base.

The transaction is valued at $14.0 million, with $9.5 million paid in cash at closing, subject to customary adjustments, and up to $4.5 million in deferred payments over the next two years. The deferred payments are contingent upon the acquired business achieving specific financial targets during the two years following the closing of the acquisition.

Mastech InfoTrellis expects to realize the following synergies from the combined enterprise:

* Mastech InfoTrellis will enhance its capabilities in customer experience strategy, global service delivery, and IP-led platforms;

* AmberLeaf's customers will have access to Mastech InfoTrellis' "enterprise intelligence hub" - powered by its data bus and knowledge graphs; and

* The AmberLeaf business will have access to Mastech InfoTrellis' global delivery engine and robust sales and marketing capabilities.

Commenting on the acquisition, Vivek Gupta, President and CEO of Mastech Digital,stated, "In 2017 we began our transformational journey to become a world-class provider of Data Management and Analytics services. The acquisition of AmberLeaf reinforces our commitment to this strategy by enhancing our ability to significantly scale our Data and Analytics business segment."

Concurrent with the acquisition, the Company entered into a revised credit facility with PNC Bank which increased its term loan facility by approximately $10 million to $17.5 million and increased its revolving loan facility to $30 million, an increase of $7.5 million from the previous credit line of $22.5 million. Commenting on the new credit facility, Jack Cronin, CFO and Corporate Secretary of Mastech Digital said, "While we could have comfortably funded the acquisition with funds available under our previous facility, this revised credit agreement will give us sufficient financial flexibility to continue to invest in our businesses in both an organic and inorganic manner."

Mastech Digital's advisors on the transaction includedThe Chesapeake Group -- investment banker and Blank Rome, LLP - legal counsel.

About Mastech Digital / Mastech InfoTrellis:

Mastech Digital (NYSE:MHH) is a leading provider of Digital Transformation IT Services. The Company offers Data Management and Analytics Solutions, Digital Learning, and IT Staffing Services with a Digital First approach. A minority-owned enterprise, Mastech Digital is headquartered in Pittsburgh, PA with offices across North America, EMEA, India and ASEAN countries. Mastech InfoTrellisis the wholly-owned subsidiary of Mastech Digital which offers professional services across data management, data engineering, and data science.