$700 Million Power Move: TCS Acquires Coastal Cloud, Its Largest Buyout...

- A rare mega-acquisition signals TCS’s aggressive push into AI, cloud and data centre expansion. - TCS is funding this deal with its $5.49B in free cash flow for FY 2024-25. - The deal is expected to close by 31 January 2026.

Adepu Bindu

11 Dec 2025 — 2 min read

$700 Million Power Move: TCS Acquires Coastal Cloud, Its Largest Buyout...

TCS is on a new AI upgrade, perhaps the costliest to date. The company is acquiring Coastal Cloud for $700 million (about INR 5,850 crore), its largest-ever acquisition. This is huge because TCS generally doesn't buy companies. In its history, TCS has acquired fewer than 6 companies. Reports suggest that this is a massive push into the data centre and AI ecosystem for TCS. So, what does Coastal Cloud actually do? What did TCS say about the acquisition? How will TCS pay for this? Why does this matter to the Tata Group? For all that, learn more.

What Does Coastal Cloud Do?

The company was founded in 2012 by Tim Hale and Sara Stanley Hale. Coastal Cloud is a Salesforce consulting company. It helps businesses use Salesforce to run their operations more effectively. The company held 400 employees as of September 2025 and made $132 million in revenue in 2024.

How Will TCS Pay for This Coastal Cloud Acquisition?

According to TCS's official financial reports, it generated $5.49 billion in free cash flow for FY 2024-25.

Hence, TCS has sufficient cash to acquire Coastal Cloud without issue. Furthermore, the deal is expected to close by 31 January 2026.

TCS’s Biggest Acquisitions Explained

Since 2004 (after TCS became a public company), the company has acquired only six companies. Its last biggest purchase was in 2008, Citigroup Global Services for $505 million. It is now acquiring Coastal Cloud for $700 million.

This move shows TCS is trying new things because in the last 3 months, TCS announced:

It will invest $6.5 billion over 6 years.
To build 1 gigawatt (1GW) of data centre capacity.
Therefore, TCS will expand into data centres, cloud, AI, and emerging technologies.

Also, last month:

TPG (a major private equity company in the U.S.) agreed to invest $1 billion in TCS.
In return, TPG will retain a 49% stake in TCS’s data centre business.

What Did Tcs Say About the Acquisition (Coastal Cloud)?

TCS’s COO (Chief Operating Officer) Aarthi Subramanian said:

“This acquisition marks a pivotal milestone in advancing our global Salesforce capabilities and accelerating our AI-led transformation agenda."

He further added, "It is another significant step towards realising TCS’s vision of becoming the world’s largest AI-led technology services company.”

Why Does This Acquisition Matter to the Tata Group?

Clearly, TCS is the most important company in the Tata Group:

TCS accounts for 41% of the Tata Group’s market value ($365 billion as of March 2025).
Last year, TCS contributed 84% of Tata Sons' total income. However, revenue growth has been slow.
Motilal Oswal, a popular analyst, says that TCS might report a full-year revenue decline. This acquisition is likely to give TCS new capabilities and business.