Mid-tier engineering services provider Cyient has said it will acquire US-based Tao Digital Solutions Inc in a $218-million all-cash transaction as it looks to expand its data, AI, and digital engineering capabilities.
The Hyderabad-based company has entered into a definitive agreement to acquire 100% of Tao Digital, including its group entities in Canada, India, Taiwan, Greece, Germany, the Czech Republic, Australia and New Zealand. The transaction is expected to close by the second quarter of FY27, subject to regulatory approvals and customary closing conditions, it said in a regulatory filing on Saturday.
The acquisition will be funded through cash consideration, including an upfront payment and performance-linked earnouts, it added.
Tao Digital, founded in 2022 and headquartered in Santa Clara, California, provides data engineering, AI-enabled platform solutions, cloud services and digital product engineering services.
Cyient expects the acquisition to strengthen its offerings in AI and data engineering, including enterprise AI adoption, data platform modernisation, GenAI deployment and AI lifecycle operations, and to add capabilities in cloud-native platforms, application modernisation, platform engineering, and quality engineering.
“(This acquisition) allows us to offer customers something rare: domain know-how with data engineering solutions i.e., over three decades of engineering heritage in the world's most complex industries, fused with AI-native data and lifecycle engineering capabilities built for how enterprise systems are being engineered today,” said Sukamal Banerjee, executive director and CEO of Cyient.
The acquisition is subject to statutory compliances and regulatory approvals.
It will strengthen its presence in automotive, hi-tech, and healthtech sectors, expanding its customer footprint and delivery in North America, Banerjee said.
Tao Digital has about 3,500 employees globally. The company reported revenue of $79.1 million in calendar 2025, up from $50.3 million in 2024 and $19.7 million in 2023, according to Cyient’s regulatory filing.
The acquisition is valued at 9.5x its estimated margins for 2027, it said.
“We have built deep, trusted relationships with some of the world's most demanding enterprises, earning a strong reputation for engineering quality and continuous innovation,” Tao Digital founder Rajkumar Velagapudi said.
The $300-billion tech service sector is seeing increased acquisitions as firms look to increase wallet share amid AI-led disruptions.
