Mergers News: 31/12/09

INDIA INC LOOKS WITHIN FOR MERGER & ACQUISITIONS
Dhriti Ranjana Ray & Rakesh Pathak/New Delhi
Business Standard  Financial Chronicle  The Indian Express  

The global economic slowdown forced corporate India to look largely within the country for merger and acquisitions in 2009, accounting for about 60 percent of the $10-billion worth of deals.

Besides, some foreign MNCs -- possibly enticed by the world's second fastest growing economy -- sought to enter India by acquiring into local companies, mostly in telecom, steel and pharma sectors.

The cross-border deals, worth about $four billion, could have been lot larger had the estimated $12-billion takeover of global petrochemicals major LyondellBasell by Mukesh Ambani-led RIL happened this year, and Sunil Mittal-led Bharti Airtel's $23-billion worth deal with South Africa's MTN not failed - for the second time.

Some experts also said that the theme of M&A space changed in 2009 from 'aggression and optimism' to 'distress sale and desperation' -- thus leading to less intense deal activity.

But, it was Ruias-led Essar group that bucked the trend and constantly went hunting overseas in sectors like oil, telecom and technology and kept the Indian flag flying on deal tables in one of the most difficult times for global economy.

Good news also came from Tatas who appeared to have overcome the impact of global meltdown on their overseas acquisitions of iconic British carmaker Jaguar-Land Rover and steel behemoth Corus in Europe.

"Deals in 2009 were extremely difficult to consummate due to lack of availability of credit, driven by global turmoil as well increased concentration of companies to consolidate their current operations and adopting a wait and watch attitude," PwC's executive director Sanjeev Krishan said.

Consultancy major Grant Thornton said that total 267 M&A deals were announced during 2009, for a total value of $10.03 billion, as against 454 deals worth $30.95 billion in 2008 and 676 deals totalling $51.11 billion in 2007.

The deal sphere was dominated by domestic deals as there were 142 domestic deals (wherein both acquirer and target company were Indian) with an announced value of $5.80 billion, while there were 125 cross-border deals with an announced value of $4.23 billion.

The major deals of the year included merger of Reliance Industries with Reliance Petroleum, Russia's $676 million investment in Sistema Shyam Telecom, Tech Mahindra's 31 percent stake buy in tainted IT firm Mahindra Satyam.

Other major M&As of the year include Sanofi Pasteur (the vaccines division of Sanofi-Aventis) 80 percent stake buy in Shantha Biotechnics for $664.89 million and Quippo Telecom's $533.33 million investment in Tata Tele Services' telecom tower and infrastructure arm.

But, India Inc's shopping spree witnessed a significant decline in 2009 amid economic uncertainties, although experts believe the economy is on the right track to recovery and deal activity next year may rebound significantly provided the pace of recovery in 2010 stays bullish.

The year 2010, however, holds promise, as corporates would take advantage of the new opportunities, slowly improving liquidity situation worldwide and the fact that the United States and Europe may witness further consolidation next year.

Going forward, PwC's Krishan said: "The FMCG, aerospace and defence and oil and gas sectors also look ripe for significant global consolidation. Another factor would be re-emergence of the strategic buyers, who had been overshadowed by financial buyers until last year."

 

KEY THEMES FOR M&A IN 2010
D. Murali
The Hindu Business Line

Sanjeev Krishan, Executive Director, PWC, Gurgaon.

Will 2010 see M&A (mergers and acquisitions) activity of the 2007-08 level? “With the economy on the right track to recovery, one may be tempted to say ‘yes,' but we are still in recovery mode, so the pace of recovery in the first half of 2010 would really determine the answer to that question,” observes Sanjeev Krishan, Executive Director-Partner, Transactions Group, PricewaterhouseCoopers P Ltd, Gurgaon.

A recovery in the credit markets would help the process; in India, smaller deals may dominate in 2010, as acquirers, especially PE (private equity) buyers, find those easier to afford, he adds, during the course of a recent email interaction with Business Line.

Excerpts from the interview:

What have been the M&A trends over the past year and how do you perceive M&A to progress in 2010?

Year 2009 has been quite a mixed bag — it started off with most of the corporate world adopting a “wait and watch” stance considering the global financial turmoil and the credit crunch.

However, economic recovery, both globally and more importantly in India, seems set to create greater M&A opportunities as the year closes. Deals in North America were valued at $115.6 billion in November, the most since September 2008, with deal volumes being five times what they were in February.

In India, too, we have begun to see foreign strategic investors return to the markets; the relatively healthier macroeconomic indicators in India and other emerging markets are anticipated to create greater inbound M&A traffic in 2010 — telecom, oil and gas and banking sectors appear to be the key sectors, with healthcare, education and mid-market IT service segments also maintaining decent deal interest.

Your take on what the key themes will be for outbound and inbound M&A in 2010.

Significant themes to Indian outbound M&A in 2010 are likely to include acquisition of distressed assets and niche technology/design centres, hunting strategic energy sources and acquisitions in newer emerging economies.

Going forward, the key inbound interest is expected in pharmaceuticals, healthcare, financial and engineering services and the consumer sectors. The prime reason for this is the anticipated growth rate of over 7 percent in the Indian economy.

Mergers News: 30/12/09

SONATA SOFTWARE TIES UP WITH MAXIMUM PROCESSING
Bangalore
The Hindu Business Line  

IT consulting and software services firm Sonata Software has tied up with Maximum Processing to increase the delivery capabilities of its Stingray System, a Web-based property and casualty insurance administration solution.

Under the tie-up with Maximum Processing, Bangalore-based Sonata will help insurance companies implement a reliable, fast and accurate core system in keeping with the requirements of dynamic business and industry environments, according to a Sonata release on Tuesday.

Maximum's Stingray is a browser-based system, which provides workflow, imaging and third party interfaces for credit card, general ledger and bureau statistics reporting functions.

AURIONPRO SOLUTIONS TO DISCUSS MERGER PLAN ON DEC 31
Mumbai
The Hindu Business Line  The Financial Express  

IT solutions provider Aurionpro Solutions on Tuesday said its board will meet on December 31 to consider the merger of Kairotef Analytic with itself.

The board would meet to consider scheme of arrangement and merger of Kairotef Analytic into the Aurionpro Solutions, subject to the approval of the Mumbai High Court, Aurionpro Solutions said in a filing to the BSE.

COMP U LEARN TO ACQUIRE 51% STAKE IN DUBAI CO
Mumbai
The Hindu Business Line

Comp U Learn Tech India on Tuesday said its board has approved to acquire 51 percent stake in Dubai-based Shouk Investment Consultancy for developing business in the Middle East countries for an undisclosed amount.

“The sole objective in acquiring this company is for the promotion and development of e-governance and e-learning businesses in the Middle East countries,” Comp U Learn Tech India said in a filing to the BSE.

BIRLA HIRES HUL LEGAL OFFICER FOR M&AS
Namrata Singh,Mumbai
The Times of India

Kumar Mangalam Birla-controlled Aditya Birla Group is beefing up its legal operations in sync with its hectic M&A activity. The group has roped in Ashok Gupta from Hindustan Unilever (HUL) as the new group legal counsel and chief legal officer. Gupta, who tendered his resignation at HUL last week, will join the AV Birla group in March 2010. He will head the legal function for the entire group, including its global operations.

While the position of chief law officer at the Aditya Birla group was lying vacant and the Birlas were on the lookout for a suitable candidate, the group's head (corporate legal), M R Prasanna is due to retire in April next year. In keeping with its pace of growth, particularly inorganic, the AV Birla group has been bolstering its legal department over the last 4-5 years. The objective is to be focused on future in a changing legal landscape.

"We wanted Ashok to join us because he has expertise in M&As. He also has global experience and was handling South Asian region for Unilever out of India," said Santrupt Misra, executive director (HR & IT), Aditya Birla Group.

As part of his profile, Gupta will interact with other business heads on various opportunities in acquisitions, mergers and divestitures. M&A activity at the Rs 1,30,000 crore AV Birla group has been gathering momentum over the past decade. From its first acquisition of Indal from Alcan at the beginning of the decade — to the acquisition of Canadian firm — Novelis, the AV Birla group has grown by leaps and bounds through inorganic growth initiatives.

Its foray into telecom through Tata-Birla-AT&T JV, and then the acquisition of Tata group's stake in Idea Cellular was another landmark. The diversified conglomerate then brought L&T's cement business into its fold, and in the last couple of years, has acquired TransWorks, Minacs and Trinethra to grow in the new age businesses of BPO and retail.

With Gupta coming on board, Aditya Birla group continues to attract people from HUL — perceived to be a hot-bed for talent. Prior to Gupta, quite a few Lever executives had joined the AV Birla group. Debu Bhattacharya, MD of group flagship, Hindalco, had quit HUL in 1998 to join the Birlas to head their fertiliser business.

 

Alliances Update: 29/12/09

K7 COMPUTING TIES UP WITH GERMAN CO
Chennai
The Economic Times

Chennai-based K7 Computing, an information security software solutions provider, has announced its foray into the German-speaking region of Europe, through a strategic alliance with Proxma, Germany’s leading software distribution company.

Proxma will market K7 Computing’s anti-virus products in Germany, Austria and Switzerland. This marks K7’s second global foray after Japan. It has its development and technical centres in Chennai.

Company MD & CEO Kesavardhanan said the alliance will enable K7 to extend its footprint into the three countries in which the company foresees a big opportunity for its products. The first product that will be marketed through the alliance is the German version of K7 Totalsecurity, to be available at all leading retail outlets.

Proxma will also market all German products launched by K7 Computing in the future. Expecting the partnership to bring about a significant change in the German internet security market, Proxma CEO Sven Lubek said the products will be available for direct sales in more than 3,000 retail outlets. K7 can reach a majority of the households in the German-speaking regions by using Proxma’s extensive network and its wide range of distribution channels.

Mergers News: 23/12/09

TATA TELE, NOVATIUM IN PACT
 DNA  The Hindu  The Statesman  

Tata Teleservices Ltd, dual technology service provider, launched Nova Navigator powered by Novatium for its Photon Pro and Photon Plus community in India. This is for the first time that a cloud-computing can now be accessible on mobile broadband device.

The services include comprehensive computing experience with special emphasis on internet, gaming, digital entertainment, online education, telephony and business productivity, Alok Singh and Lloyd Mathias, CEO, Novatium Solution Systems and chief marketing officer Tata Teleservices respectively said.

Mergers News: 22/12/09

L&T INFOTECH, SAVVION SIGN PACT
Mumbai
The Statesman  Deccan Chronicle  

IT services provider, L&T Infotech, today announced a strategic partnership with Savvion to provide Business Process Management (BPM) solutions.

Savvion is a leading business process management company.

The facilities will be in the areas of business process modelling, implementation and integration solutions and services to its clientele, a release said.

The BPM marketsize is estimated to reach $2.6 billion globally by 2011.

The partnership expands upon L&T Infotech's Business-to-IT Connect that provides cutting-edge solutions and services to clients across multiple continents.

Savvion Business Process Management Systems (BPMS) enables organisations' to operate more competitively and cost-efficiently. With Savvion BPM, organisations will become more efficient, gain better visibility in operations and more agility to respond to change business conditions quickly, the release said.

TATA DOCOMO, SATNAV TIE UP FOR TRACKING SERVICES
New Delhi
The Financial Express

SatNav Technologies, a major GPS navigation services and products provider has forged a partnership with new GSM telecom service provider Tata DoCoMo to offer round-the-clock tracking service through the mobile phone.

It will be one of its kinds to be offered over the mobile phone, Amit Prasad, managing director and CEO of SatNav Technologies said, adding that the company will set up a call centre where subscribers of the service can call up to track the whereabouts of the device and the person.

“So far such kind of tracking could only be done through a separate device that had to be carried all the time. However, our service will be offered through an application that users can subscribe and install on their phones,” he said.

Initially priced at 10 paisa per second or Rs 6 per minute, Prasad said the service will essentially be useful for companies which have a high number of on-field personnel who need to be tracked from time to time. “The service has multi-usage but will come in handy especially for parents,” he said.

SatNav was earlier part of Satyam Computer Services (now Mahindra Satyam) and was spun off into a separate entity in the year 2004. Prasad said the company would soon offer the service with service providers too, which includes the Airtel, Reliance and Idea.

However, one factor which could limit the spread of the usage is the fact that the service will only be offered on phone that have Windows Mobile or Android software. “We are working towards making the service available on other phones as well,” he said.

 

COMP U LEARN EYES 60 PERCENT IN TRANSOFT
Financial Chronicle

IT firm Comp U Learn Tech India on Monday said its board will meet on December 27 to discuss the acquisition of 60 percent stake in software development firm Transoft Infosolutions.

 

Mergers News: 21/12/09

INTERRAIT ENTERS INDIA VIA TIE-UP WITH TATWA
Kolkata/Bhubaneswar, December 21, 2009
Business Standard

InterraIT, a USA-based innovative IT solutions provider has announced its foray into the India market through a strategic alliance with the city-based Tatwa Technologies. InterraIT, which has two development centres in Kolkata and Noida, has so far been providing complete software and IT solutions for the Fortune 500 companies in the US and other countries.

Asoke Laha, managing director and chief executive officer, InterraIT said, “InterraIT is serious about developing software solutions for Orissa and eastern India. We will be happy to offer our vast domain knowledge to serve the government and the people of Orissa.”

Commenting on the tie-up, A K Mohanty, managing director and chief executive officer, Tatwa Technologies said, “We are very hopeful of the alliance with InterraIT as we can jointly leverage our strengths into offering specialized solutions for e-governance.” InterraIT and Tatwa are working on a concept of mobile governance involving mobile applications in specialized fields. InterraIT’s strengths and its varied experience of world class project delivery for the Fortune 500 companies worldwide in wide spectrum of verticals and domains and exposure to the highest end technologies will now combine with Tatwa’s service experience in the domestic market, said an InterraIT release.

InterraIT’s consulting services and service delivery competencies will now be available to Orissa and other states through Tatwa’s market presence. Tatwa will also play a partnership role in maintenance, fine-tuning and even development on a case to case basis.

InterraIT and Tatwa are jointly planning serious inroads in the e-governance areas across India and also in mobile applications to provide services for the major telecom companies. 

SOFTPRO PLANS TWO BUYOUTS IN US, UK
K Rajani Kanth, Chennai/Hyderabad, December 21, 2009
Business Standard

Hyderabad-based software provider, SoftPro Systems Limited, is looking at acquiring two companies by the end of the next financial year. The move is aimed at strengthening its position in the governance, risk and compliance (GRC) solutions space through both organic and inorganic growth.

“Footprint-wise, we currently have over 250 customers in the GRC space globally. However, to get on top of the charts, we might make two acquisitions if we get a right fit. US and the UK will be our major focus this time,” K Vijay Rao, vice-chairman of SoftPro, said.

The company will actively pursue the buyouts from the second quarter of 2010-11 for acquiring complementary technologies like business intelligence, gaining market access and getting new customers into its fold, he said, while declining to quantify the size of the acquisitions that it was proposing to make.

In June 2009, SoftPro had acquired South Africa-based Cura for a structured consideration of $19 million (Rs 90 crore) in an all-cash deal, which includes earnouts over the next three years. Globally, GRC as a market (software, advisory, consulting and services) is pegged at $30 billion, which is projected to touch $50 billion over the next five years.

SoftPro’s scrip ended the trade at Rs 244 on the BSE on Friday.

“With every multinational now looking at adopting GRC as a key management practice, we are developing Version-IV of Cura’s software to be ahead of the curve. We plan to roll it out in the next 16 months,” Rao said. The 150-strong company would hire 50 more professional at its global product development centre in Hyderabad, which was created at an investment of $3 million (Rs 14.1 crore), by March 2010.

SoftPro, which has set an internal target of achieving consolidated revenues of $200 million (Rs 940 crore) in the next five years, projects its revenues to touch $10 million (Rs 47 crore) this financial year, as against $7 million (Rs 33 crore) last fiscal.

Joint Venture News: 15/12/09

INFOSYS MAY FORM JV WITH SIEMENS UNIT
Amit Tripathi, Mumbai
DNA

Infosys Technologies, India's largest IT firm by market capitalisation, is evaluating prospects of forming a joint venture with the IT solutions and services unit of German manufacturing firm Siemens AG, a source familiar with the development said.

Infosys officials could not confirm the development. "We have not looked into it. When it comes up we will see," V Balakrishnan, chief financial officer, Infosys, told DNA Money.

However, the source maintained that teams in Infosys are aware of the development in Siemens and "are secretly working on it". The source added that the deal evaluation is in preliminary stages.

At the end of FY2008-09, Infosys had a free cash flow of over $1.1 billion.

The Siemens unit may be available at an attractive valuation owing to its recent lacklustre financial performance, the source pointed out.

Siemens' IT Solutions and Services was badly hit in FY2009. The unit's revenue fell to euro 1.15 billion from euro 1.46 billion in FY2008. More importantly, the unit failed to earn profits while it had managed a 45million euro profit in the previous year. The order pipeline also reduced from euro 1.39 billion in FY2008 to euro 1.09 billion in FY 2009.

Merger News: 14/12/09

PARTYGAMING IN MERGER TALKS WITH BWIN: REPORT
London
Mint

PartyGaming Plc, the online poker group, cofounded by an Indian Anurag Dikshit, is in merger talks with Austria's Bwin, a move that could create a £2 billion (Rs15,180 crore) Internet gambling giant, media report said on Sunday.

"The two sides have been holding on-off talks since the summer. PartyGaming, led by chief executive Jim Ryan, is expected to be asked by the Takeover Panel to clarify the position before the market opens tomorrow morning," `The Sunday Times' said

Acquisitions News: 11/12/09

EINFOCHIPS ACQUIRES NGIN TECHNOLOGIES
Mumbai/Ahmedabad
Business Standard

Ahmedabad-based technology design services and solutions company, eInfochips Ltd, also based in Sunnyvale, CA has acquired nGIN Technologies, a Chennai headquartered hi-tech networking software and protocol stacks, solutions and services provider for telecom OEMs.

The acquisition has been carried out on an earn out model for a period of three years, said Nirav Shah, director—marketing, eInfochips, without disclosing the deal size.

With this acquisition, eInfochips will now offer a wider and deeper portfolio of networking products and services to its customers. According to Pratul Shroff, CEO, eInfochips, "The addition of nGIN's analytic network solutions will further strengthen eInfochips ability to help deliver reliable, flexible and cost-effective network and value-added network product development services. nGIN's EZ-Test, a test automation and management product complements our existing capabilities in networking testing and verification."

nGIN Technologies provides communications software stacks and solutions for design and productising to telecom OEMS in areas of telecom networking infrastructure and consumer premise equipments.

The company's offshore development center specialises in providing cost effective IP networking services and solutions across multiple spaces including infrastructure and consumer devices.

Deal News: 10/12/09

COGNIZANT IN MULTI-MILLION DOLLAR R&D DEAL WITH INVENSYS RAIL
Chennai
 Financial Chronicle  

Cognizant has signed a five-year multimillion-dollar contract with Invensys Rail in order to serve its global product research & development needs of its group companies.

“Cognizant has signed an initial five-year, multi-million dollar contract with Invensys Rail to serve the global product R&D needs of its group companies located in the UK, Australia, Spain, and the USA”, a company press release said.

Under the agreement, Cognizant would augment Invensys Rail products, and help the company leverage Cognizant’s process maturity to bring in greater operational efficiency and cost-effectiveness to its global product R&D processes.

In view of this, offers to join Cognizant would be made to over 120 Invensys Rail professionals from its existing R&D center in Hyderabad, it said.

The tie up would help Cognizant strengthen its presence in the rail industry by enhancing its ability to provide end-to-end services to rail customers and expanding its customer base through industry-leading competencies in safety-critical application development.

Alliances News: 9/12/09

SYMANTEC, WIPRO TIE UP FOR DATA BACK-UP SERVICES
Bangalore
The Statesmen  Financial Chronicle  The Asian Age   

Wipro Ltd today inked a new partnership with Symantec Corporation to provide data back up and loss prevention, in addition to recovery infrastructure consultancy services.

Announcing the pact here Symantec India Channels and Alliances Director Ajay Verma told reporters, “information is the most valuable asset of any organisation and ensuring it does not fall into wrong hands is critical to its reputation and business. The partnership will offer customers a better insight into data risk”.

It will provide customers the confidence that their information is secure, he said.

Wipro’s expertise along with Symantec Veritas Backup Reporter’s capability to identify and quantify exposures before they impact backup operations will help customers achieve greater efficiency, security and cost reduction, Wipro Infotech Vice President and Business Head Infrastructure Technology Solutions Division Vikas Srivastava said. 

MAPMYINDIA, SYGIC TIE UP
New Delhi
The Hindu Business Line

MapmyIndia has joined hands with Sygic, European navigation software provider to launch, MapmyIndia Sygic Mobile Maps. The new application converts Global Positioning System-enabled mobile phones into GPS navigators. The application uses MapmyIndia maps with Sygic software to provide GPS navigation solutions for mobile phones.

Mergers News: 2/12/09

GSS AMERICA INFOTECH EYES ACQUISITION
Financial Chronicle  

IT solutions firm GSS America Infotech has decided in-principle for acquisition of identified firms, as part of its in-organic growth plans. The board has authorised its CEO to do next steps of due-diligence.

L&T INFOTECH EYES BUY IN $200-500 M REVENUE RANGE
Dow Jones, Bangalore
The Hindu Business Line

L&T Infotech Ltd is looking for an acquisition in a revenue range of $200-500 million.

L&T Infotech wants to buy a company as this will help it achieve its goals of $1 billion revenue and listing on stock exchanges by March 2012, V.K. Magapu, Director, L&T group, told Dow Jones in a recent interview. “We have to do an acquisition. There is no doubt about it,” said Magapu. “We wanted to do it (reach $1 billion revenue and list) by 2010, but we will miss the boat by a couple of years,” he said, adding that the company currently clocks about $450 million annual revenue.

He added that L&T Infotech sees synergy in acquiring a company in the US, which will give it market presence in the country's software industry's biggest market.

The L&T Infotech Chief Executive, Sudip Banerjee, said the company is keen on acquisitions as a strategy to expand its business. He added that it could acquire to build business volume or to add new customers and service lines.

However, Banerjee termed reports of the company seeking to pick up a stake in rival Patni Computer Systems as “market speculation.” Funding any acquisition isn't a concern as the company has a strong parent in Larsen, he said. “We are part of a very large conglomerate where the ability to raise money is certainly there.” Magapu said another reason for the company's March 2012 listing timeframe is that it is likely to wait for a rise in the parent company's shares, which are expected to mirror increased activity in the power and infrastructure sectors.

“When that rise (in L&T shares) is beginning to plateau, L&T Infotech will list,” Magapu said.

Banerjee said listing as an independent company will give the company more legitimacy as a serious player in the industry, and is not meant to raise funds.

Mergers News: 30/7/09

HEXAWARE OPEN TO ACQUISITIONS IN REMOTE INFRA MGMT, BPO SPACES
Mumbai
 Financial Chronicle  

IT major, Hexaware Technologies, is open to inorganic expansion and would consider any good buy in the remote infrastructure management and BPO spaces, a top company official said.

"We are open to good acquisitions, especially in the remote infrastructure management and BPO spaces. We will look at those companies which we can integrate well with our work culture," Hexaware's Founder and Executive Chairman, Atul Nishar, said.

With USD 79.5-million cash in hand, funding will not pose a problem, Nishar said, adding that the company was interested in companies in North America and Western Europe.

However, no acquisition was on the immediate horizon, he said.

With its Q2 FY 09 revenue at Rs 2,591-crore exceeding its quarterly guidance and PAT vaulting 128.4 percent at Rs 39-crore, the company was optimistic about its growth in the last two quarters of FY 09 as well as 2010, he said.

Mergers News: 28/7/09

HCL INKS PACT WITH CHINESE EBAOTECH CORPORATION
New Delhi
The Economic Times  Financial Chronicle The Financial Express  DNA (Mumbai edition)  

IT services provider HCL Technologies has entered into a strategic alliance with the China-based eBaoTech Corporation, a provider of software and services for life and general insurance industry.

Under the agreement, HCL would work with eBaoTech to identify fitment of eBaoTech's products in select geographies, HCL said in a statement today.

Moreover, the companies together expect to help insurance carriers and intermediaries adopt IT solutions that would allow them to gain better process efficiencies in a cost effective manner, it added.

"We look forward to working with HCL to create significant and tangible value for insurance industry to become much faster, better, most cost efficient, and more scalable," eBaoTech CEO Woody Mo said.

Premkumar S, Corporate Officer, (Global Business Sponsor - Financial Services) HCL Technologies, said, "We are very excited about our partnership with eBaoTech as part of our product partnerships portfolio and see a lot of potential across major focus markets. As one of the leading end-to-end specialist insurance solution providers in the industry, HCL is equipped to fulfill the industry requirements by combining with eBaoTech's insurance system software capabilities."

2ERGO BUYS INDIAN MOBILE MARKETING CO
Mumbai
The Economic Times

Aim-listed 2ergo, a global provider of mobile marketing, mCRM and media solutions, has entered the Indian market with the acquisition of Activemedia Technologies (AMT), one of India’s top mobile marketing and value-added service providers.

The UK-headquartered AMT is a global provider of mobile ticketing and couponing services, which include the longest-running m-promo in the world, “Orange Wednesdays”, the cinema-ticket promotion for mobile operator Orange that made Wednesdays the most popular cinema going week in the UK. The campaign ran in India as “Hutch Tuesdays”.

Chris Brassington, group MD, 2ergo, said: “The Indian mobile market holds vast potential for us with 10 percent of users choosing internet-enabled mobile phones in a technology leap that forgoes computers in favour of straight to mobile data.” In India, AMT serves mobile operators, including Airtel, Vodafone, Idea, Reliance and Tata. Blue-chip clients include British Airways, P&G, ABN Amro, ING, Hyundai and Western Union.

Raj Singh, ED of AMT, added: “The combined offering will be very compelling for retailers, mobile network operators, FMCG, entertainment and media companies.” AMT has also appointed Ramesh Krishnan, a veteran of AT&T, Lucent, Avaya and VeriSign, as COO.

WEB SPIDERS PICKS 51% STAKE IN NETWINGS INFO
Kolkata
Business Standard

Web Spiders (India) Pvt Ltd, a Kolkata-based software consulting firm, has acquired 51 percent stake in Netwings Infotech Pvt Ltd (NIPL), which is engaged in delivering fibre optic networking and GIS solutions.

The development marks the company’s entry into systems integration, which was earlier only into manufacturing and software development. Another company, Supreme & Co Pvt Ltd, manufacturer of fibre optic, telecom and power equipment, has a 50 percent shareholding in Web Spiders.

Siddharth Jhunjhunwala, CEO, Web Spiders, explained, “With this acquisition, we have created a synergistic end-to-end platform from manufacturing to software and systems integration for our customers”. He, however, declined to give the value of the 51 percent stake. Jhunjhunwala added that the Rs250 crore Group is now bullish on the engineering, procurement and construction (EPC) contracts in the power sector, together with e-Governance and large activity projects in Geographic Information System (GIS) and weather services and fibre optic backbone for industrial automation.

Netwings, for example, has already worked with Reliance Big FM's Mumbai station for weather updates and forecasts, D Mallick, CEO of the company informed. The group targets to grow by 45-50 percent in terms of revenue this fiscal. The Group is also looking at overseas acquisitions in areas of web-based software development and has set aside around $ 5 million for the same.

INTELLIGROUP EYES BUYOUTS IN US, INDIA FOR $18MILLION
K Rajani Kanth, Chennai/ Hyderabad
Business Standard

US-based Intelligroup Inc, a provider of strategic IT consulting, application management, support and implementation services with its global delivery centres in Hyderabad and Bangalore, is pursuing acquisitions in the US and India, which have the right set of competencies in the business intelligence (BI), infrastructure management and testing space. “We are in talks with a couple of companies in the US and India – the markets where is are strong in – which would complement our enterprise resource planning (ERP) offerings. As on March 31, 2009, we have cash and cash equivalents to the tune of $18 million (approximately Rs 88.2 crore), which we intend to utilise to fund the buyouts,” Intelligroup’s president and chief executive officer, Vikram Gulati said, while declining to draw any time line for closing the deals.

Intelligroup had, in 2007, acquired IGS Novasoft, a UK-based company, which had a good SAP implementation methodology, for $3 million (Rs 14.7 crore).

Stating that the company would stay focused on life sciences, consumer products, discrete manufacturing, process manufacturing and insurance verticals, Gulati said they were also looking at tapping the renewable energy space. “The US government’s plans to earmark a $15-billion spend every year for renewables hold maximum promise for us. We are still awaiting that money to start trickling down,” he added.

Intelligroup currently has six US clients in the renewable energy space – including Ausra, which develops and deploys utility-scale solar technologies to serve global electricity, SumPower that manufactures high-efficiency solar power solutions for residential, commercial and power plant applications, and solar technology company Miasole – together contributing about 5 percent to its overall revenues

The US market, Gulati said, at present contributes 75 percent, while Europe and India account for 10 percent and 5 percent respectively and the rest flowing in from other geographies like Japan. “We clearly want to derisk the US. Europe will grow faster this year,” he added.

Intelligroup, which follows a January-to-December financial year, reported a 19.7 percent decrease in its revenues to $30.9 million (around Rs 151.41crore) for the first quarter of 2009, as compared to $38.5 million (Rs 188.65 crore) in Q1 of 2008. “Though it is clear that the full year 2009 will be a challenging period with revenue levels below those in 2008, we are on track to improve our operational efficiency and reduce costs to best manage our margins,” Gulati said.

 

Acquisition News : 24/7/09

SAP TO ACQUIRE SWISS CO SAF FOR $100 MILLION
New Delhi 
  The Tribune  The Hindu Business Line

Global IT firm SAP today said it was looking to acquire Switzerland-based software developer SAF AG for around $100 million.

“We are in the process of acquiring SAF AG. We are in talks and have gone for public bidding. The size of the acquisition is around $100 million,” SAP Indian Subcontinent Managing Director Ranjan Das said here on the sidelines of an event. Das, however, declined to give further details and the time-frame by which the acquisition would take place.

SAF is a Swiss forecasting and replenishment software developer in the field of retail and wholesale industries. The company today launched a software, SAP BusinessObject Explorer, here and said the Indian retail sector had a lot of potential considering its size and opportunities.

“Now the retail sector has extended beyond the traditional stores. It is more organised and companies are coming forward for a better way of management and supply chain organisation. This is where our solutions can help,” SAP Asia Pacific Japan vice-president (Service Industries, Industries and Solutions Group) Sandeep Shirodkar said.

Talking about its new product, the company said the new software would help them go beyond just being a Business Intelligence provider. The software will also help organisations take decisions at the managerial level as well.

Mergers News: 23/7/09

METRICSTREAM ANNOUNCES PARTNERSHIP WITH SIGMAQUEST
Bangalore
Business Standard

Bangalore-based MetricStream has inked a pact with SigmaQuest, for delivery of end-to-end product quality management and compliance solutions.

Announcing the partnership here today, Nader Fathi, CEO of SigmaQuest in a statement said "military and aerospace, electronic manufacturers and FDS-regulated industries, that utilise both companies' software solutions, can get instant feedback on quality throughout their products' lifecycles with this alliance".

SigmaQuest, the on-demand leader in scalable solutions for product quality management, helps brand owners and manufacturers worldwide build top quality, electronics-based products for medical device, telecom, military & aerospace, consumer electronics and other industries.

MetricStream is a global governance, risk, compliance and quality management solutions provider.

 

IDEACTS JOINS HANDS WITH GOOGLE
Mumbai
The Hindu Business Line

Ideacts Innovations has joined hands with Google to improve the Web search experience for its cybercafé users.

Ideacts uses its proprietary software 'CLINCK' to advertise user-targeted material to cybercafé users across India, the company said in a press statement.

Rudrajeet Desai, Co-Founder and CEO, Ideacts Innovations, said "Together with Google, we are working on making search more accessible to give our cybercafé users a better experience."

The company was founded in March 2007 and has received early stage investments from Sequoia Capital and SVB Financial Group.

M&A News: 21/7/09

 

M&A DEALS DIP 54 PERCENT IN FIRST HALF OF ’09
Sangeetha G, Chennai
Financial Chronicle  Mint  

During the first half of 2009, Indian companies were involved in a total of 136 merger and acquisition deals, down 54 percent from the same period in 2008, according to a recent study by a research firm.

In addition, the deal activity was down by 28 percent compared to the second half of 2008, according to Venture Intelligence, a research service focused on Private Equity and M&A transaction activity in India.

The average deal value during H1 2009 was $98 million, down from the average deal value of $162 million in H1 2008. During the half-year period 55 deals had announced transaction values.

In the largest deal during the period, ONGC Videsh acquired UK-listed Imperial Energy for $1.9 billion. This was followed by Tech Mahindra’s $576 million bid for Satyam Computers and Sesa Goa’s $350 million acquisition of Dempo Mining Corporation.

Over 50 percent of the deals in H1 2009 were domestic acquisitions, as against only 40 percent in H1 2008. The most preferred destination for Indian acquirers was the US with seven of the 31 outbound targets in H1 2009 located in that country, followed by the UK with three deals.

The IT & ITES and Manufacturing industries accounted for the most number of acquisitions during H1 2009 with an 18 percent share each. The activity in the IT and ITES industry however fell from 27 percent during the same period last year. The share of manufacturing deals fell marginally from 20 percent.

AVAYA TO BUY NORTEL’S ENTERPRISE SEGMENT
New Delhi
The Hindu Business Line  The Economic Times (Bangalore edition)  

Avaya in India will benefit from the global move by Avaya Inc to acquire Nortel Networks Corporation’s enterprise solutions business for $475 million.

The global deal was announced late on Monday from Toronto as part of Nortel’s plans to hive off its various businesses globally.

While Avaya is already the market leader in the enterprise communications segment, the acquisition of Nortel’s business solutions will give it more teeth in India. Nortel India has provided total call centre solutions and data networking equipment to a broad range of Indian enterprise customers across multiple vertical markets and diverse geographical areas.

In the call centre and BPO market, Nortel has more than 16,000 agent positions deployed for companies such as Bharti Airtel, Tata Consultancy Services, Hinduja Technology Media Telecom, iSeva, Office Tiger and ICICI OneSource among others. Nortel has contracts with four airports undertaking modernisation activities and also has a deal with TCS for the passport project.

Nortel also has traction in the data networking space with clients such as Centre for Artificial Intelligence and Robotics, Indian Institute of Science, Sungard Automated Securities, Apollo Health Street, Logica and Cognizant Technology Solutions. All these clients could now move to Avaya’s portfolio.

Commenting on the announcement, the Nortel President and Chief Executive Officer, Mike Zafirovski, said: “We continue to be fully focused on running our operations and continuing to serve our customers while actively engaged in the sale of our businesses. We have determined that the sale of our businesses maximises value while preserving innovation platforms, customer relationships and jobs to the greatest extent possible.”

 

M&A Updates: 16/7/09

INBOUND M&A RISES 45 PERCENT
New Delhi
The Economic Times (Delhi edition)

Inbound merger and acquisition activities in India grew by over 45 percent in April-June quarter this year, with IT/ITeS, Banking, Financial Services and Insurance and telecom sectors witnessing maximum action, an industry study said. The quarter saw M&A worth $7,907.11 million against $5,439.23 million in the same period last year "The IT/ITeS sector has continued to attract foreign companies for M&A despite the Satyam non-governance issue and the global economic slowdown," Assocham study said. M&A activities in the sector increased to $8,046.24 million in June quarter of FY'10, from $219.35 million in the previous quarter last fiscal. In value terms, however, the overall M&A deals declined by 12.76 percent to $9,484.91 million.

 

SIFY TECH SIGNS UP WITH CISCO TO LAUNCH MANAGED SERVICES IN INDIA
Mumbai
Business Standard  The Financial Express  

Sify Technologies, a leader in consumer Internet and enterprise services in India with global delivery capabilities, announced today the launch of Managed Multi Protocol Label Switching (MPLS) (a high performance telecommunications network) and Managed Internet Service as part of the Cisco Managed Services Channel Program (MSCP).

This service is the first of a series of Managed Services that Sify Technologies plans to launch over the next two years.

The Managed MPLS Service will provide world-class solutions with end-to-end service assurance to enterprises for their business critical networks. The services are a part of Sify's strategy to migrate from Time Division Multiplexing to Internet Prootcol based network services and introduce a full suite of Managed Services for Indian enterprises.

"Our aim is to move beyond network management to offer and provide converged application services on business critical networks as an end to end managed services provider for Indian enterprises.

The Cisco Tier 1 certification is a step in that direction, for it reinforces our world class MPLS network and service offerings capabilities to our customers," said PJ Nath, executive president, Enterprise Services, Sify Technologies.

Over the next two years, Sify will start offering a wide range of managed IP based services in a phased manner. These services will enable enterprises to outsource some of their most important IP communication services with complete investment protection and scalability.

 

3I INFOTECH BUYS OUT STAKE IN CHINA JV
Mumbai 
  The Hindu Business Line  DNA (Mumbai edition)  The Times of India (Bangalore edition)  Financial Chronicle  

Mumbai-based mid-cap IT firm 3i Infotech will buy the entire 49 percent stake of Elegon Infotech from Yucheng Technologies, its joint venture partner in China. Elegon Infotech will then become a wholly owned subsidiary of 3i Infotech.

3i Infotech had announced the formation of the JV earlier this year, which marked its foray into the Chinese market. The company had entered into a MoU with Yucheng Technologies for establishing a 51:49 JV.

“Yucheng wanted to concentrate on their core business. So, we have bought the 49 percent stake of the company. But they will continue to be our partners in China. Besides, some of the senior executives will continue to be with us,” said Amar Chintopanth, ED and CFO, 3i Infotech.

For 3i Infotech, its China operations are at a nascent stage, with about 80 people. “We have invested about $4-4.5 million (around Rs 195-210 crore) in the region. In the product business, we have been able to get a couple of small deals in the China market and we have a target to breakeven in this region by the end of this financial year,” added Chintopanth.

Weidong Hong, CEO, Yucheng Technologies, said: “Yucheng has been overextended and unable to allocate the resources necessary to promote each of our growth initiatives. By refocusing on our core competency in software & solutionn for the banking industry, we have a clear mandate from which to drive our business and financial growth.”

A Nasscom-McKinsey report ‘Perspective 2020’, said BRIC countries will open up additional opportunity of $380-420 billion by 2020. Almost 50 percent of this market will come from China.

 

VAYANA ACQUIRES SOLUTIONNET
Chennai
The Hindu Business Line

Vayana, a Chennai-based start up, has acquired SolutionNET, also a city-based company, which has over 25 banks as customers, for an undisclosed sum. Vayana, which started operations in January, has a team of experts from banking and financial services (BFS) industry and received funding from the HDFC Group, while SolutionNET has products and customers in the BFS sector, said H. Srikrishnan, Co-Founder and Director, Vayana.

“We will not be able to reveal any number s. I can only say that SolutionNET was a cash positive company when we acquired it in May. The integration is now over,” he added.

While Vayana will be the new brand of the merged entity, SolutionNET will be for product and service for BFS.

SolutionNET has around 120 employees and provides services to customers such as HDFC Bank, Corporation Bank, Shamil Bank and Sharjah Islamic Bank. The Al Omania Bank runs its entire business on SolutionNET’s loan management system. The integrated team will create a business-to-business network of financial services that can be accessed by users through mobile phones and the Internet, he told newspersons

Mergers Updates: 15/7/09

PEROT PIPS WIPRO, TCS IN RACE FOR BEARINGPOINT UNIT
MV Ramsurya & N Shivapriya, Mumbai
The Economic Times

The world may have seen a slowdown in cross-border M&A deals due to the recession, but the software sector is witnessing a frenetic pace of consolidation globally.

In a closely-fought bid that was kept under wraps, two large Indian companies — Wipro and Tata Consultancy Services — made independent efforts to acquire the European business of software major BearingPoint, but only to be pipped by the US-based Perot Systems which emerged as a front-runner.

BearingPoint Europe is currently valued at more than $700 million — about Rs 3,360 crore at current exchange rates — and would have been one of the largest out-bound acquisitions by the Indian software industry, in more than a year.

The move follows the completion of the acquisition of BearingPoint’s North American, Japanese, Chinese and Indian businesses by PricewaterhouseCoopers, as the consulting firm wanted to have a strong presence in emerging markets.

Both Wipro and TCS have denied any such move to acquire BearingPoint. However according to people close to the development and bankers involved in the exercise, the two Indian technology giants had been keen till the second stage of the acquisition process and had also accessed BearingPoint’s data room before opting out of the race due to valuation issues.

The 100-year-old BearingPoint is one of the world’s largest management and technology consultants, which was spun off as a separate firm from KPMG in 1999, but slipped into bankruptcy two years ago. Large consulting businesses have already bid and won parts of the large organisation that has a strong presence in not just the developed world, but also in emerging markets.

The European business has been a prime target for established Indian software firms. Indian service providers, which still get a majority of their revenues from the US, have been intensifying efforts to expand their client base in regions, including continental Europe.

“As usual, we do not comment on market speculation,” a TCS spokesperson said in response to an ET query. A Wipro spokesperson said: “We will be unable to comment on market speculation.” TCS recently acquired the India-based BPO arm of Citigroup, Citigroup Global Services, for $512 million — about Rs 2,457 crore. BearingPoint provides management and technology consulting services. Even as recently as December, it was reported to have won a $250-million — about Rs 1,200 crore — contract, despite being wobbled by financial woes.

Both Wipro and TCS have been far more aggressive than the other software major, Infosys. When queried about its interest in BearingPoint, a Wipro spokesperson said: “We will be unable to comment on market speculation.” Wipro's largest acquisition to date has been that of the US-based Infocrossing for $600 million — about Rs 2,880 crore today.

“My reading is that the acquisition may have been too large for the Indian players to swallow. They were interested, but only in parts of BearingPoint's Europe businesses and not the whole firm,” said one banker on why TCS and Wipro could have dropped out.

While PricewaterhouseCoopers completed its part acquisition of BearingPoint in June, in May, another consulting firm, Deloitte took over the public services business of BearingPoint for about $350 million.

9.9 MEDIAWORX ACQUIRES IGOVERNMENT.IN
New Delhi
The Financial Express

iGovernment.in, India’s first government-focused comprehensive online portal has announced its strategic acquisition by 9.9 Mediaworx.

iGovernment.in is India's first interactive web platform and info-portal for knowledge sharing by all stakeholders that takes an integrated approach towards good governance.

Set up by New Delhi-based technology journalists, Shubhendu Parth and Pravin Prashant, the portal was incubated by Goosefish Media Ventures (a subsidiary of WebChutney) in March 2008.

“The acquisition of iGovernment adds significant value to our diverse portfolio,” says Pramath Raj Sinha, Managing Director and co-founder of 9.9 Media.

“The team has created a very successful business of generating relevant content for dissemination through interactive digital publishing which complements our expertise in shaping the new-media industry. There was a natural partnership brewing here, and we are thrilled to take a step in the right direction,” adds Sinha.

With this acquisition, 9.9 Media has also acquired the important domain expertise in Shubhendu Parth and Pravin Prashant—founders of iGovernment.in, who will be responsible for developing products in the government sector community, as well as new publications in other verticals.

SOFTWARE AG
The Times of India (Bangalore edition)

Software AG, Germany’s second-largest software maker, offered to buy technology-services company IDS Scheer AG for 477 million ($667.3 million), the biggest acquisition in its 40-year history.

 

Mergers News: 14/7/09

NEST TIES UP WITH NVIDIA
Thiruvananthapuram
The Economic Times

Network Systems and Technologies (NeST) based at the Technopark here has tied up with visual computing initiative major Nvidia Corporation, whereby the former will provide professional services and multi-core services to their joint customers worldwide. Officials said NeST would also establish a centre of excellence with products from Nvidia to develop solutions for their customers.

NeST managing director N Jehangir said the partnership would help his company provide high performance computing solutions to customers. NeST Software president S Sasi Kumar said the computing team at NeST had used Nvidia tools to extract exceptional performance to meet demanding requirements of applications like medical imaging, industrial inspection, modeling and simulations.

Nvidia sales director for Middle East, Africa and India, Daniel Saison said the CUDA centre of excellence was the latest sign that GPU computing had established itself as a key technology for the future of high performance computing.

NeST, which offers customized software and hardware development services for engineering applications and product development services for customers worldwide, has operations in North America, Middle East, Europe, Asia and Australia.

 

Mergers News: 13/7/09

LPU, CADENCE SET UP REGION’S FIRST VLSI LAB
Jalandhar, July 13, 2009
Hindustan Times (Chandigarh edition)

Lovely Professional University (LPU) and US software major Cadence have collaborated to set up the region’s first very large scale integration (VLSI) laboratory here to provide industry-grade electronics design and automation (EDA) tools in chip designing for budding engineers

LPU Chancellor Ashok Mittal said that the lab, set up at a cost of Rs 16 lakh, would help create integrated circuits by combining thousands of transistor-based circuits into a single chip

“The university has decided to introduce VLSI as subject in the second and third year of electronics and communication engineering, computer science and engineering and information technology disciplines from the coming academic session

We aim to train nearly 1,000 students and faculty members per year at the newly set-up lab,” Mittal said

He said the lab would pro- vide low-cost solutions for technical problems of the region’s industry

“The academia-industry link- age will help budding engineers here concentrate on industry specific problems for low cost solutions, giving much-needed impetus to research and development,” he said, adding no institution barring a few IITs and a handful of institutes of higher learning across India possessed such a lab

The US software major would provide regular technical upgrades to assist students undertake their projects

“This will ensure career success in the sunrise field of graphic design and also help bridge the gap between academic curriculum and industry readiness,” Mittal added

Mergers News: 9/7/09

MPHASIS PARTNERS UK FIRM FOR AUTOMATION TECHNOLOGY
New Delhi
The Economic Times  The Times of India  

IT services firm MphasiS on Wednesday said it has partnered with UK-based software vendor Singularity for using the latter's technology for automation of business processes for its clients.

Under the agreement, MphasiS will use Singularity's business process management (BPM) technology to automate processes for clients across sectors like financial services, manufacturing, healthcare, communications, transportation, consumer and retail and energy, MphasiS said in a statement.

BPM technology eliminates unnecessary steps and reduces manual inputs in a process, increasing the number of activities that can be carried out in parallel, which results in reduced costs and management overhead as well as increased throughput capacity.

"This alliance in particular reflects our long-term focus on driving new levels of efficiency in knowledge intensive sectors such as banking, energy and health-care," Singularity Chief Executive Officer Padraig Canavan said.

Mergers & Alliances: 2/7/09

ZYLOG LOOKS TO THE US, EUROPE FOR ACQUISITIONS
Mithun Roy, Chennai
The Economic Times

Zylog Systems is believed to be in talks with three companies in the US and Europe for acquisitions. According to people familiar with the development, the deal is in the range of $20-40 million and likely to be concluded over the next three months.

It was learnt that Zylog, which provides technology solutions to Wi-Fi businesses, had formed an mergers & acquisition team, which has identified these companies.

The company’s MD & COO, Ram Sesharathnam, confirmed that Zylog is looking at the possibility of acquiring companies, but declined to divulge further details citing non-disclosure agreements with these prospective targets. On Wednesday, Zylog shares ended 0.5 percent higher at Rs 196.10.

TRICOM IN STRATEGIC PARTNERSHIP WITH HLDL
Tushar Pawar, Mumbai/Nashik
Business Standard

Tricom Document Management, a 100 percent subsidiary of Tricom India Ltd, has entered into a strategic partnership with Hobs Legal Docs Ltd (HLDL).

Tricom Document Management is a specialist in electronic management solutions while HLDL provides reprographics and technology services to law firms and corporations in the UK, US and mainland Europe.

“This strategic partnership with HLDL will provide Tricom a platform to reach out the law firms and corporations in UK, US and mainland Europe, particularly with regard to the outsourcing of document reviews which can represent 90 percent of the costs in dealing with electronically stored information in an investigative or litigation context,” the company sources said.

In FY 2008-09, Tricom India recorded a 66 percent increase in turnover to Rs 85.26 crore, against Rs 51.24 crore in the previous year (FY 2007-08). Its consolidated net profit stood at Rs 14.14 crore during the period.

BSNL INKS MOU WITH NTT COM
Deccan Chronicle

India’s largest integrated telecom service provider, Bharat Sanchar Nigam Ltd. (BSNL) and NTT Communications Corporation (NTT Com), Japan has signed a memorandum of understanding (MoU) through which both organisations will jointly explore their strengths and expertise so that customised offerings and solutions can be given to their enterprise customers.

BSNL has created a separate vertical following an internal reorganisation for this enterprise. BSNL intends to provide complete end-to-end total telecom and IT solutions to enterprise customers and also bring the global best practices and products to enterprise segment customers.

 

Mergers & Acquisitions News: 30/06/09

HCL TECH HOPES TO CLOSE FIVE BIG M&E DEALS BY YEAR END
Kirtika Suneja
Business Standard

Delhi based HCL Technologies expects to sign around the five deals in the media and entertainment (M&E) space. Talks are on with four global companies and one Indian firm, and HCL plans to close these deals, mostly each between $50-200 million (Rs 240-950 crore) by year-end.

The company is looking at opportunities in this area with large media conglomerates, two of which are based out of Europe.