Tech Mahindra announces merger of Healthnxt with parent company

IT services firm Tech Mahindra announced the merger of the wholly-owned step-down subsidiary Heathnxt Inc. with its parent company Tech Mahindra (Americas) (or TMA) with approval from respective companies on Tuesday. A step-down subsidiary is a company that is owned by another company, which in turn is owned by a parent company at the top of the ownership chain. In this case, Healthnxt is a wholly-owned subsidiary of TMA, a Tech Mahindra-owned entity.

“We wish to inform that a plan of merger of Healthnxt Inc., wholly-owned step-down subsidiary of the company with its parent company viz Tech Mahindra (Americas) Inc., wholly-owned material subsidiary of the company, has been approved by the respective companies on Tuesday, June 25, 2024," a company filing said. 

The company said that the businesses of Healthnxt and TMA are complementary. Consolidation of the entities will streamline business operations, optimise operational costs, and reduce compliance risk. There will be no cash consideration or issue of new shares involved under the merger. The investment of TMA in Healthnxt will be cancelled on the merger becoming effective, the company said in its filing. 

TMA offers services such as computing consulting, programming support, and IT management in various industries including healthcare. Incorporated in the US in 1993, it recorded a turnover of $1.153 billion for FY24. Healthnxt, on the other hand, is a virtual healthcare company offering integrated inpatient experience at home and outsourced services. It had a turnover of $1.7 million for the same period. 

Notably, in March, Tech Mahindra announced its decision to merge its wholly-owned step-down subsidiary, Born Group Inc., with its parent company, TMA. Born Group specialises in brand strategy, brand identity exploration, and visual design for mobile apps, and digital, and physical products in the US.

In September 2023, along with second-quarter results for FY24, Tech Mahindra announced that its director board has approved the merger by absorption of three of the company's subsidiaries and their shareholders.