Indian IT's top acquisitions

[VelMurugan]

Indian IT's top acquisitions

Indian IT is facing challenging times with its biggest market US reeling under economic slowdown and its largest vertical BFSI sector in a global turmoil. However, the tough times has not decreased the industry's acquisition appetite. With falling valuations and market cap due to global recession, analysts have been calling the time ripe for acquisitions.

Indian companies too seem to be in a mood to cash on the opportunity and expand their presence across the globe, especially US, as a recent report shows. According to a joint study by Ernst & Young and FICCI, during the two consecutive financial years, 2007-08 and 2008-09, Indian companies made 143 acquisitions across various sectors in the US.

In 2007-08 alone, 94 deals were concluded (the value of the deal was disclosed in 55 cases and stood at a total of $4,432 million). The size of the deals was between the range of $0.8 million and $1,005 million.

The Indian IT industry too cashed on the opportunity and made some crucial acquisitions during the period. Here's looking into the key acquisitions made by Indian IT companies over the past few months.

Source : indiatimes

[VelMurugan]

Wipro acquires Citi Technology Services

In December 2008, Wipro Technologies, the global IT services business of Wipro has acquired Citigroup's subsidiary, Citi Technology Services (CTS) formerly called Citos for $127 million. CTS, the technology and infrastructure outsourcing arm of Citi provides information technology services and information to Citi entities worldwide.

The India-based Citi Technology Services (CTS) provided IT infrastructure management and application development services to Citigroup. The acquisition gave Wipro access a pool of 1,650 employees who are on the payroll of CTS and another 400 contractual employees. The new entity has historically operated at margins similar to or greater than Wipro, according to Wipro's management.

[VelMurugan]

TCS acquires Citigroup Global Services

In October 2008, India's largest IT services provider Tata Consultancy Services (TCS) beat business process outsourcing (BPO) majors like Genpact and IBM to acquire the back-office operations of Citigroup for $505 million.

The acquisition broadens TCS's portfolio of end-to-end IT and BPO services in the global banking and financial services (BFS) sector. With Citigroup Global Services under its fold, TCS became the second-largest BPO player globally, after IBM.

Along with the sale, Citi also signed an agreement with TCS to provide process outsourcing services worth $2.5 billion over the next nine-and-and-a-half years. Citi will be the first global bank to have outsourced its entire banking processes, including core banking operations, to a third party.

[VelMurugan]

HCL-Axon deal

For the first time in Indian IT industry, India's two top firms rivaled each other to buy UK-based Axon, one of the major SAP consulting players with about 2,000 consultants. In August, Infosys made a 407 million pounds bid for Axon. A month later, (in September), Noida-based HCL Technologies offered an 8.3 per cent higher bid at 650 pence a share in cash to acquire Axon Group.

Infosys Technologies, which had first made the bid for Axon in August, said that it wonङt raise its offer price and thus moved out of a possible bidding war. HCL's bid was considered expensive when it was announced and the worsening business environment led to further skepticism.

[VelMurugan]

Wipro acquires Infocrossing Inc

In August 2007, Wipro expanded its presence in the United States as well as its offering of services through a $600 million acquisition of Infocrossing, a US-based infrastructure management services provider.

The $232.44 million New Jersey-based Infocrossing, which was founded in 1985 and its wholly-owned subsidiaries provide IT outsourcing solutions to companies, institutions and government agencies in the US.

Just two months after the acquisition, Wipro Infocrossing won a $275 million multi-year outsourcing deal to provide BPO and IT services to Missouri HealthNet Division, an agency run by the state government to provide health care services to Missouri residents.

Before Infocrossing, Wipro has made eight IT acquisitions primarily to gain access to new markets in Europe and the United States. However, the company typically paid about $50 million for each of those acquisitions.

[VelMurugan]

Accentia Technologies acquires DenMed Transcription

In 2007, Mumbai-Based business process outsourcing company Accentia Technologies acquired Oregon-based medical transcription services provider DenMed Transcription. DenMed Transcription was acquired for $66 million. DenMed had revenues of $1.5 million.

Accentia director Pradeep Viswambharan said that the acquisition would add to the company's portfolio in the healthcare receivable cycle management.

DenMed provides services including Electronic Medical Record (EMR) solutions, System-customized EMR exchange, Electronic record conversion and transfer.

[VelMurugan]

Accentia Technologies buys GSR Physicians Billing/GSR Systems

In 2007 again, Accentia Technologies acquired two more US-based healthcare BPOs. The company bought Florida-based GSR Physician Billing Inc and GSR Systems Inc in cash-cum stock deals.

The deal value was estimated to be $63 million. The GSR group companies reported revenues of $3 million each. The company hoped to add nearly $10 million to its topline by way of these acquisitions.

GSR/Physician's Billing Service provides billing and collections services, coding consulting, and medical software. The company was formerly known as GSR Systems, Inc. GSR/ Physician's Billing Service was founded in 1996 and is based in Cooper City, Florida.

[VelMurugan]

Mascon Global buys Jass & Associates Inc/SDG Corporation

New Delhi-based IT services firm Mascon Global (MGL) acquired New York-based Ebusinessware Inc last year, which offers IT solutions and consulting to financial services firms, for about $35 million.

Ebusinessware provides technology solutions and services in areas like credit risk management, market risk management, credit derivatives, business process management and reference data management.

The company had then said that acquisition will bring in additional revenues of $60 million. Ebusinessware has over 1,100 employees, of which approximately 750-800 are based in India and the rest in the US.

Following the acquisition, Ebusinessware was rebranded as MGL Finance and all MGL businesses catering to financial services clients brought under the same.