Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: list of goods taxed at 4% :: Central Excise rule to resale the machines to a new company :: VAT RATES :: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: TDS :: articles on VAT and GST in India :: empanelment :: due date for vat payment :: VAT Audit :: cpt :: TAX RATES - GOODS TAXABLE @ 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARD
« Mergers and Acquisitions »
 The Role Of Brand In Petroleum Mergers And Acquisitions
 Mergers and Acquisitions: What Happens After the Announcement?
 Agency mergers and acquisitions continue to be strong for first-half 2016
 The Intricacies Of Financial And Legal Relationships In M&A
 3 integration considerations for Mergers & Acquisitions
 Mergers and acquisitions take centre-stage as funding for start-ups dries up
 Mergers and Acquisitions reach highest quarterly value in India
 18 digital health exits (mergers, acquisitions, and IPOs) in Q3 2016
 Number of mergers and acquisitions rise in 2016, Experian finds
 Indian startups are more willing than ever to acquire and be acquired
 India’s mergers and acquisitions reaches highest quarterly value in Q3 2016: Report

IT - ITeS firms put mergers and acquisitions (M&A) in fast lane
April, 14th 2011

With growth back on track, the $71-billion IT-ITeS industry is now opting for mergers and acquisitions (M&A), with higher revenues, a presence in different geographies and newer service lines in mind.

The past three months alone have seen big-ticket acquisitions Genpact buying Headstrong and Igate Patni,with deals ranging between $500 million and $1billion.

There have been low-profile acquisitions too, including that of Wipro-SAIC, Capgeminis buy of two French companies and HOV Services clubbing with Sourcecorp.

On April 6, the countrys largest BPO, Genpact, acquired US consulting and IT services firm Headstrong for $550 million,the biggest acquisition in the BPO space so far. The deal clearly brings Genpact into the IT services business, along with greater presence in the US.

Pramod Bhasin, CEO and president of the company, said, We want to have our centre of gravity closer to customers and clients in the US and UK. Headstrong presently has 60% of its employees onshore, which will help us build the onshore capability further. Headstrong CEO and president Sandeep Sahai gives his perspective on the acquisition. He said, We had a lot of clients in the capital market, but it has never been enough.

We wanted to have delivery centres across the globe and build key leaders in analytics, KPO and re-engineering. We will have a global reach in the US and Asia as well for end-to-end services in IT and BPM integrated. Headstrong generated revenues of approximately $217 million in 2010 and Genpact expects Headstrongs long-term growth rate to be in excess of 20% per year. This could take Genpacts yearly revenues to $1.5 billion.

Sangeeta Gupta, senior vice-president of Indias apex software body, Nasscom, said, Large IT contracts are preferential towards larger companies and another reason for these acquisitions is to integrate IT and BPO capabilities and not just scale.

The $1.2-billion Igate-Patni deal, which has been the trigger of all acquisitions, was mainly for reasonsof scale and IT-BPO integration. It was also owing to the mismanagement of Patni as a company, say analysts. Both the companies were of similar scale, in terms of revenues, before the acquisition.

Nikhil Rajpal, partner, Everest Group, a management and consulting firm, also feels, These acquisitions happen more for strategic reasons rather than scale. The tier-I IT-ITeS companies are growing at a rate of 30%.

Though some of the top performers in tier-II companies are able to match the tier-I league in growth, the laggards in tier-II bracket, growing at an industry average rate of 18-20%, are now getting acquired.

Recent times have seen many companies opting for mergers and acquisitions to enter a new geography or add a new service line and have nothing or very less to do with scale.

Take for instance IT company Capgemini acquiring French companies Artesysand Avantias for $56.9 million.

Artesys develops information technology infrastructure, while Avantias specialises in enterprise content management. Similarly, Wipro Technologies signed an agreement to acquire the oil and gas IT practice of Science Applications International Corporation (SAIC) for an all-cash consideration of approximately $150 million, subject to adjustments.

As a result of the transaction, approximately 1,450 employees are expected to transition to Wipro across North America, Europe, India and the Middle-East.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
E-catalogue online catalogue E-brochure online brochure online product catalogue online product catalogue e-catalogue Indi

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions