Navigating Cross-Border Acquisitions: How Indian IT Firms Can Expand to the US and UK

The US and UK markets remain the gold standard for enterprise clients, deeper pockets, and credibility. But for most small and mid‑sized IT firms, cracking those markets from scratch feels like pushing a boulder uphill.

That’s where cross‑border M&A comes in—not as a shortcut, but as a smarter route. Buying (or selling to) a firm across borders is complex, yes, but it’s also one of the fastest ways to gain scale, clients, and tech capabilities.

Why the US & UK Are the “Next Chapter” for Indian IT Firms

• Access to premium clients: The BFSI, healthcare, and retail sectors in the US and UK tend to have larger budgets and spend significantly.
• Tech credibility: Acquiring a specialised AI firm in Boston or a cybersecurity boutique in London can greatly enhance your company’s positioning.
• Policy advantages: The recent UK-India free trade agreement exempts Indian professionals from paying UK National Insurance for three years, providing significant cost savings for mid-tier IT firms expanding into the UK.

Real‑world proof

• 2024: Firstsource buys UK‑based Ascensos for £42M → gains instant CX presence.
• 2025: WNS acquires US startup Kipi.ai for $75M → adds AI‑enabled services.
• Kellton Tech: A decade of stitching together small US firms (Supremesoft, eVantage, etc.) to build presence step by step.

For Founders Thinking of Selling: What Makes You Attractive?

• Recurring revenue rather than one-off projects is preferred. Buyers appreciate retainer clients that provide 12 to 18 months of revenue visibility.
• A strong presence of Western clients is important; even a few well-known logos in the BFSI (Banking, Financial Services, and Insurance) or healthcare sectors can significantly enhance credibility.
• Maintaining a clean compliance record is crucial. Being compliant with standards such as GDPR, ISO, and SOC 2 saves potential buyers from future headaches.
• Independent operations are also valued. For example, when Firstsource acquired Ascensos, it allowed it to operate largely autonomously.

You’re not just selling code or contracts. You’re selling trust, processes, and a bridge into your market.

For Indian Firms Looking to Buy: How to Approach Cross‑Border Deals

• Define the “why” from the start. Are you focused on clients, technology, intellectual property, or market presence? For example, WNS acquired Kipi.ai for its AI capabilities, not just for geographical expansion.
• Maintain flexibility in deal structures. Some transactions use cash, while others may involve share swaps—offering equity in the Indian parent company instead of cash (note that RBI rules apply).
• Engage local counsel early in the process. In the U.S., CFIUS may review transactions, and in the U.K., GDPR and antitrust regulations must be considered.
• Don’t overlook cultural due diligence. A Bangalore DevOps founder who acquired a UK-managed service provider admitted that the most challenging aspect wasn’t the pricing; it was getting the teams to collaborate effectively after the deal.

The Big Challenges No One Talks About (Until Too Late)

• Regulatory landmines: Miss a GDPR clause or FEMA requirement, and your deal stalls.
• People leaving: Nearly half of employees leave within a year of a poorly integrated M&A, crippling people‑heavy IT firms.
• Misaligned expectations: Western sellers expect independence; Indian buyers sometimes assume full absorption.

Making the Deal Stick (Post‑Acquisition)

• Build a blended integration team (HR, tech, finance) that includes people from both sides.
• Respect brand identity—many acquirers keep the acquired company’s name in the market.
• Align on go‑to‑market: how to cross‑sell without overwhelming the acquired team.

Quick Takeaways

• For Sellers: Clean financials, compliance, and diverse clients attract buyers.
• For Buyers: Have a clear strategy—market entry, technology enhancement, or client growth.
• For Both: Company culture and integration are as important as valuation.

Final Word

Cross-border mergers and acquisitions (M&A) can be quite challenging—just ask anyone who’s experienced the late-night legal calls and post-deal cultural clashes. However, for small and mid-sized IT services firms, it represents one of the most effective strategies for growth and global relevance.

In the coming decade, Indian IT firms that not only aspire for global presence but also actively pursue acquisitions and partnerships will thrive. Additionally, this growth will be supported by founders from the US and UK who are eager to collaborate in this journey.