TCS Scores $2.25 Billion Deal with Nielsen

Tata Consultancy Services (TCS) bagged a $2.25 billion outsourcing contract from Nielsen, a television rating measurement company based in the United States. The deal, which is one of the largest such agreements for an Indian firm, led to increase in the share price of India’s largest outsourcing firm.

The new contract is an extension of their collaboration that has been ongoing since 2007. Nielsen and TCS had then signed a $1.2 billion contract, in which the Mumbai-based company took responsibility for important IT and operational processes and helped Nielsen integrate and centralize multiple systems, technologies and processes on a global scale. It was a 10-year-deal that was later expanded to $2.5 billion in 2013 to 2020.

The latest deal expands the collaboration till 2025. With the new agreement, TCS is assured of $320 million in business from Nielsen every year from 2017 to 2020, $186 million in annual revenue from 2021 to 2024 and $139.5 million in 2025, according to a regulatory filing made by Nielsen to the U.S. Securities and Exchange Commission.

“The term of the Agreement has been extended for an additional five years, so as to expire on December 31, 2025, with three one-year renewal options granted to Nielsen,” said the Nielsen statement. “In connection with the entry into the Agreement, the parties have agreed to terminate the separate Global Infrastructure Services Agreement between them as of the Effective Date and include the services provided thereunder in one or more Statements of Work (‘SOWs’) arising under the Agreement. TCS will globally provide Nielsen with professional services relating to information technology (including application development and maintenance), business process outsourcing, client service knowledge process outsourcing, management sciences, analytics, and financial planning.”

According to the statement, TCS will provide services relating to IT —including application development and maintenance — BPO, client service knowledge process outsourcing, management sciences, analytics, and financial planning.

TCS CEO Rajesh Gopinathan is being lauded for the renewed agreement. He took over as the CEO in February 2017 after his predecessor N Chandrasekaran was appointed the chairman of Tata Sons.