Deal Beat

Volume 10 - May 2005

Acquisitions
Global Acquisitions
New Business Deals

Acquisitions

There has been no respite to the acquisition spree that the industry has been witnessing during the last financial year. Indian companies continue to spread their geographical presence through strategic acquisitions. The final quarter too witnessed a spate of acquisitions, mostly by IT companies, in their efforts to broaden service portfolios and to strengthen their presence specific geographies. ITeS industry too witnessed some interesting moves with industry bigwigs like ICICI Onesource, HCL Technologies and Mphasis marking their presence through select international acquisitions. Deal Beat looks at some of the significant deals that took place in the last quarter of the FY 04-05.

MindTree acquires Linc Software (May 05)

MindTree Consulting has acquired Bangalore based Linc software to enhance its presence in the application development and maintenance domains for IBM mid-range systems. This acquisition further strengthens MindTree’s presence in the Europe and adds a wealth of new clients to its existing client base. Linc Software clientele include some of the fortune 500 companies such as Unilever and NovarFtis.

Satyam acquires Citisoft (Apr 21)

Satyam Computer Services Ltd has acquired Citisoft, an investment management consulting firm, for $23.2 million and an additional performance based payment of up to $15.5 million over a three-year period. Post acquisition, Citisoft would operate as a subsidiary of Satyam and be a part of Satyam's Financial Services Group. Citisoft is a specialist consulting firm that focuses solely on investment management. With a client base of more than 75% of the top 50 global asset managers, it is the foremost supplier of strategic planning and business consulting services to the institutional and private wealth investment management sector.

Nortel (Apr 07), Nokia Growth Partners (Apr 20) invest in Sasken

Nortel Networks Corp., a premier telecom equipment maker has invested $10 million for an undisclosed stake in Sasken Communication Technologies, a Bangalore based telecom R&D outsourcing company. This move is expected to reinforce the 15 year relationship that Nortel has with Sasken. Sasken offers a unique combination of complementary IP software components, research and development consultancy and software services to leading semiconductor manufacturers, network equipment companies, and global wireless handset developers. Following Nortel, Nokia Growth Partners has invested $3 million in Sasken Communication Technologies for an undisclosed stake.

Calsoft acquires Webspectrum (Apr 20), American HealthNet (Mar 22)

California Software Co Ltd. (Calsoft) has acquired Webspectrum Software Pvt. Ltd., a Bangalore based IT company focusing on networking products and network management systems, US based healthcare software product company. Calsoft has also signed an MoU with American HealthNet Inc. (AHN) to acquire 51 percent stake in AHN for an all cash deal of $ One million. AHN provides integrated enterprise software application to community healthcare organizations and has a customer base of over 250 hospitals and clinics.

CTS acquires Fathom Solutions – (Apr 19)

Cognizant Technology Solutions, a leading IT services provider has acquired a Chicago based consulting company, Fathom Solutions, LLC, for a $19 million cash and stock deal. This move is expected to strengthen Cognizant’s consulting practice in the telecommunications and financial services industries, given the fact that Fathom's clients include major industry players in telecommunications and financial services.

Helios and Matheson acquires vMoksha – (Apr 12)

Helios and Matheson (H&M) has acquired three vMoksha entities – vMoksha Technologies Inc, USA, vMoksha Technologies Pte Ltd, Singapore and vMoksha technologies Pvt Ltd, Bangalore for a $19 million deal. This acquisition is expected to strengthen H&M's presence in the Europe. vMoksha, a Bangalore based IT outsourcing company, has a strong presence in the healthcare segment and has offices worldwide including San Jose, New Jersey, London, Toronto, Singapore and India.

ICICI Onesource buys Chennai based RevIT (Apr 02)

ICICI Onesource has acquired RevIT Systems, a Chennai-based healthcare BPO company. This move helps ICICI Onesource to expand its service offerings to the health care domain. ICICI will now be able to include RevIT's certain transaction processing components into several verticals that ICICI Onesource is already focusing on. RevIT has proprietary technology for transaction processing functions such as adjudication transaction, claims processing and workflow management.

Talisma buys KnowledgeBase.net – (Mar 30)

Talisma has acquired KnowledgeBase.net, provider of hosted and on-site knowledge management (KM) software for customer support and self-service. The acquisition is the culmination of over 18 months of technology, product and business collaboration between the two companies that has already resulted in several product and service offerings. The acquisition of KnowledgeBase.net is expected to further enhance Talisma's suite of CRM solutions and strengthen Talisma's position in the fast growing customer interaction management (CIM) segment of the CRM market.

Juniper Networks acquires Kagoor Networks – (Mar 30)

Juniper Networks, Inc. has signed a definitive agreement to acquire Kagoor Networks. The deal is valued at $67.5 million in cash, plus options and certain other incentives and equity compensation. Juniper Network offers secure and assured networking solutions and Kagoor's offerings is expected to complement the former to deliver cost-effective solutions in areas like VoIP and other media services. Post-acquisition, Juniper will leverage Kagoor's strategic partnerships with Lucent, Siemens and NEC and the R&D center in Israel.

Global Edge acquires Ionic Microsystems – Mar 30

Global Edge Software, Bangalore based embedded software services company has acquired Ionic Microsystems, a company specializing in VoIP, Video on Demand, WLAN and Blue Tooth technologies. By this acquisition, Global Edge Software will now be able to provide end to end solutions in embedded wireless and residential gateway areas.

Akamai acquires Speedera (Mar 17)

The US based Akamai Technologies has acquired Speedera Networks, a provider of content delivery services in a stock for stock deal valued at around $130 million. By integrating Speedera, Akamai expects to accelerate content processes online. Post-integration, Speedera would merge with Akamai and act as an offshore center. Akamai is expecting to expand the Indian centre rapidly than the other two centers in the US.

Mphasis acquires Eldorado (Mar 14) and Princeton Consulting (Feb 15)

Mphasis BFL Ltd has acquired US-based Eldorado Computing Inc, a healthcare insurance business process outsourcing company for an all cash deal of $ 16.5 million. This acquisition will help Mphasis strengthen its presence in the US and diversify into healthcare insurance and payment processing business. Eldorado Computing is business process outsourcing company specializing in claims processing in health care sector. Mphasis also acquired a London-based consulting company Princeton Consulting in an all cash deal for 7.73 million pound sterling. Princeton specializes in business consulting, integration of customer relationship management packages and customer support among others.

Kanbay acquires Accurum, Inc. (mar 04)

Kanbay International, Inc., a global IT services firm, has acquired Accurum, Inc., an offshore IT services provider to the capital markets industry. The purchase price includes a $5 million closing payment plus contingent payments of up to $7 million, payable upon performance. Accurum’s high-end domain expertise complements and adds to Kanbay’s focus on IT services to the financial services industry. Accurum offers technology solutions for capital markets firms within the front and middle office, including Sales and Trading, Risk Management and Research.

STI buys Hyderabad based Symphony Data (Feb 25)

STI knowledge, Atlanta-based healthcare BPO services company has acquired Hyderabad-based Symphony Data, for $7.5 million cash and stock deal. This acquisition will help integrate STI and Symphony Data's capabilities to offer services in a blended shore model. STI, which offers healthcare administration, claims processing, technical help desk, and other services, will now be able to offer a blended delivery model, including on-shore, off-site and offshore.

HCL Tech acquires AnswerCall Direct (Feb 24)

HCL Technologies BPO Service (NI) Ltd, subsidiary of HCL Technologies in Northern Ireland, has acquired AnswerCall Direct contact centre in Northern Ireland in a Rs 29.39 crore deal. The acquisition has made HCL the largest BPO operation in Ireland. HCL Technologies had bought AnswerCall from PricewaterhouseCoopers.

GCI acquires Planetasia (Feb 23)

Global Consultants Inc (GCI) has acquired a majority stake in Planetasia, a Microland Group company, for an undisclosed sum. GCI is expected to pick up close to around 60 percent stake. Planetasia is an Indian off-shore outsourcing company that provides technology consulting, application development and technology enabling services. The other investors including J P Morgan, ICICI Ventures, will continue to hold some stake in Planetasia.

Sierra Atlantic acquires Sceptre (Feb 22)

SIERRA Atlantic has acquired Sceptre, a US-based consulting company, in a cash-cum-stock deal. This move is expected to strengthen Sierra Atlantic presence in the US west coast and also expand its technology offerings. Sceptre has a customer base of 150 in the east coast and will help Sierra Atlantic to further mine their existing accounts.

Global Acquisitions

Oracle acquires Oblix (Mar 28)

Oracle has acquired Oblix, a developer of identity-based security products. The nine year old firm, Oblix, is a leading developer of identity management software and its product portfolio includes CoreID for identity management, identity federation server software ShareID, and CoreSV for managing Web services. Oblix is the latest among the series of acquisitions made by Oracle. It had acquired Peoplesoft for $10.3 million in December and later acquired Retek, a retail applications maker for $630 million.

HP acquires Snapfish – Mar 24

HP has signed a definitive agreement to acquire Snapfish, an online photo service company. The deal is expected to close at around $300 to $400. Snapfish allows consumers to share, store and print their photos online and has more than 13 million members. Post-acquisition, HP expects that its ability to capitalize on the growing market for online photo printing will be enhanced significantly.

New Business Deals

Wipro bags order from Akzo Nobel (Apr 27)

IT major Wipro has bagged a three-year contract from Dutch pharma major Akzo Nobel for an undisclosed deal for providing infrastructure management services. Wipro will help create a single IT environment by providing infrastructure management services for Akso Nobel's distributed centres across multiple locations in the US and Europe. Akso Nobel is a Dutch company that is focused on pharma, coatings and chemicals.

Fujitsu wins Lloyds TSB's £170m contract (Apr 15)

Fujitsu Services has won a five-year, £170m contract from Lloyds TSB. Under this contract Fujitsu will manage, update and maintain the IT systems of the retail banker. The company will run a range of services for the bank, including IT support, helpdesks and maintenance, as well as taking over responsibility for supplying, configuring and installing new hardware.

IBM to manage Allianz Life Korea's IT infrastructure (Apr 14)

IBM has entered into a 10 year outsourcing contract with Allianz Life Korea to manage the latter's IT infrastructure. This will help Allianz concentrate on its core business and strengthen its IT infrastructure while reducing longer-term computing costs. Allianz will be charged fees based on actual computer usage, under IBM's on demand pricing model, resulting in a responsive IT system that is both flexible and cost-efficient.

Huawei Tech bags order from HFCL Infotel (Apr 12)

In a deal worth $70 million, Delhi based HFCL Infotel has chosen Huawei Technologies, a Chinese telecom major, as its supplier for telecom products and solutions. Under this deal Huawei will supply HFCL CDMA network and terminals, fixed network solutions, intelligent network and optical transmission solutions, to meet the requirements of the latters expansion plans.

Ness Technologies bags offshore contract form Cartesis (Mar 28)

Ness Technologies has bagged an offshore contract from Cartesis, a leading business performance management vendor. Ness Technologies will establish an R&D center at Ness Technologies' Managed Labs facilities in Bangalore for Cartesis, which would be named Cartesis Bangalore Product Group (BPG). BPG is expected to complement Cartesis existing R&D resources in Paris and London.

Subex bags its largest single contract (Mar 24)

Subex Systems has bagged a multi-million dollar contract from a large African telco, for its RevMax revenue maximization suite. The largest ever contract for Subex will help further consolidate its position in the African Market. RevMax suite includes Ranger Fraud Management System and INcharge Revenue Assurance Solution for the telecom industry. RevMax maximizes revenue and profits through assuring earned revenue, enhancement of revenue and cost optimization.

Satyam bags order from Bridgestone Corp. (Mar 22)

Satyam Computer Services Limited has entered into an agreement to run SAP at Bridgestone Corp, Europe. Under this agreement, Satyam will provide application maintenance and support services to Bridgestone Europe for a three-year period. Bridgestone Europe is headquartered in Brussels, Belgium, and has six manufacturing plants and one technical centre across Europe.

Euronet to manage Centurion Bank's ATMs (Mar 17)

Euronet Worldwide, Inc., a leading electronic payments provider, has signed multiyear agreement with Centurion Bank, a leading private sector bank in India for ATM outsourcing and deployment agreement with Centurion Bank. Under the agreement, Centurion Bank will outsource its entire network of 152 ATMs to Euronet India. Euronet will take over the entire operation of the bank's ATMs and provide end-to-end ATM outsourcing services from its operations center in Mumbai.

Wipro Infotech ties with Redhat (Mar 07)

IT major Wipro Infotech has entered into a tie-up with Red Hat to offer Linux services in India. As a result Wipro can now offer customers cost-efficient and scalable solutions built around Linux platforms. Apart from providing basic services, Wipro would offer application, migration, up gradation, desktop services and enterprise management services to Linux customers.

EDS bags £15m outsourcing deal (Mar 02)

EDS has won a £15m outsourcing deal to manage the desktop infrastructure at Cheshire County Council. Through this seven-year contract, EDS will provide a range of services including procurement, maintenance, support and disposal services for 5,000 PCs at the council. This deal is apart from the existing broadband network contract that EDS had signed with Cheshire.

Hewitt bags order from Thomson (Feb 04)

Hewitt Associates, a global human resources services firm, has signed a contract with The Thomson Corporation, a global integrated information solutions provider, to provide HR business process outsourcing (BPO) services for the latter. Hewitt will provide certain HR BPO services in the areas of benefits, compensation, payroll, learning and development and recruiting for Thomson's 28,000 employees in the United States for a period of 5 years.

TCS partners with CA for security solutions (Feb 03)

Computer Associates International, Inc. (CA) has entered into a strategic partnership with Tata Consultancy Services Limited (TCS) in India to secure the latter’s operations covering 55 centers globally by deploying CA's e Trust - an end-to-end security solutions. This move is aimed to provide ease of compliance to various regulatory requirements such as Sarbanes Oxley, HIPAA, privacy requirements, etc.

BT and Accenture sign landmark deal (Feb 02)

BT and Accenture entered into a deal worth $575 million for global HR business process outsourcing. BT has retained Accenture as its partner, extending its original 5 year contract signed in August 2000 for a decade.