Tech Mahindra partners with TONOMUS for cognitive city development
Tech Mahindra, a leading global technology company, has entered into a significant collaboration deed with NEOM Tech and Digital Company (TONOMUS). This agreement, subject to regulatory clearances, involves the creation of a new wholly-owned subsidiary (JVCo). The collaboration is poised to bring about innovative developments in the field of cognitive city development, enhancing Tech Mahindra’s global presence in technology services.
Services and Solutions Offered by the JVCo
The JVCo, once established, is set to provide a range of services and solutions to TONOMUS, other NEOM group companies, and various customers. These services will encompass product and platform development, engineering services, network services, metaverse services, intellectual property development, and cognitive solutions. This broad spectrum of services underlines the JVCo’s commitment to driving innovation in cognitive city development.
Purpose and Terms of the Partnership
The purpose of this agreement is to establish the principles and key terms of the partnership between Tech Mahindra and TONOMUS. Tech Mahindra will incorporate JVCo as a wholly-owned subsidiary, focusing on cognitive cities and enterprises in the Kingdom of Saudi Arabia. The partnership will involve the contribution or licensing of certain assets and intellectual property by both Tech Mahindra and TONOMUS to the JVCo.
Equity Warrants and Governance Structure
TONOMUS will initially receive equity warrants in JVCo, which may be granted additional warrants based on specific revenue thresholds achieved by JVCo. These warrants, subject to the terms of the Collaboration Deed, can be converted into shares of JVCo. The JVCo’s board of directors will initially consist of five members, with Tech Mahindra appointing four directors and TONOMUS one. The governance structure will be adaptable depending on JVCo’s revenue achievements.
Rights and Restrictions in the Agreement
Both parties in the agreement will have a right of first refusal on the sale of any JVCo equity securities, subject to conditions detailed in a forthcoming shareholders’ agreement. Additionally, there will be restrictions on disposing of equity securities in JVCo to a mutually agreed-upon list of prohibited transferees.
Impact and Future of JVCo
This collaboration between Tech Mahindra and TONOMUS marks a significant step in advancing technology solutions for cognitive city development. The establishment of JVCo underlines a commitment to innovation and growth in the technology sector, particularly in the Kingdom of Saudi Arabia. This strategic alliance is expected to contribute substantially to the development of innovative technology solutions and services in the region.