IBM INKS DEAL WITH IYOGI
Financial Chronicle
IBM on Tuesday announced that it has signed a data centre agreement with iYogi, a leading provider of direct-to-consumer and small business remote tech support. The implementation would enable iYogi to scale its hardware infrastructure to address the growing business demand for its remote tech support services across the globe, IBM said in a statement.
HCL TECH-ELECTROLUX PACT
Hindustan Times Financial Chronicle Business Standard The Statesman
HCL Technologies on Monday said it has signed a five-year IT infrastructure management contract with home appliances maker Electrolux. As part of the deal, HCL will support Electrolux’s workplace services including proactive monitoring and management of network, servers, IT security and end-user computing environment in the Asia Pacific region, including Australia, HCL Technologies said in a statement. The deal size was, however, not disclosed. #end
INDIA INC ANNOUNCES $14 BILLION M&A DEALS IN JUST 45 DAYS IN 2010
New Delhi
The Economic Times
India Inc has once again started to splurge this year with the domestic firms announcing merger and acquisition deals worth a whopping $14 billion in just 45 days.
The way the companies have begun shopping, it looks the year 2010 is all set to overtake the M&A deal tally of 2009 by a huge margin. In just 45-days of 2010 India Inc has announced deals worth $14 billion, while in the year 2009, corporate India made deals worth a modest $11.9 billion.
According to the monthly deal report of VCCEdge, a financial research provider, the M&A deal value during January 2010 stood at $2.8 billion and yesterday's $10.7 billion Bharti-Zain offer, wherein Bharti intends to buy Kuwait-based Zain telecom's mobile operations in Africa, takes the total kitty to over $14 billion.
In terms of deal size, the Bharti-Zain deal would be the third largest transaction involving an Indian firm after an estimated $13.5 billion offer by Reliance to get control of the bankrupt petrochemicals firm LyondellBasell Industries (which is currently under discussion) and the Tata Steel's takeover of Europe-based Corus for $12 billion.
The Bharti-Zain deal could catapult Bharti Airtel in the league of world's top 10 telecom operators.
Bharti has entered into exclusive talks with Zain for acquiring its African operations based on an enterprise value of $10.7 billion, the telecom major said in a statement today.
This is Bharti's third attempt in the last two years to enter the African market. In September 2009, Bharti's talk with MTN for a $23-billion merger deal fell apart due to various regulatory hurdles, including dual listing. Last month it had bought a 70 percent stake in Bangladesh's Warid Telecom.
Some of the other mega M&A deals involving an Indian entity are -- the Vodafone Hutchison deal ($10.8 billion), the Hindalco-Novelis transaction ($6 billion), Daiichi- Ranbaxy ($4.50 billion), ONGC-Imperial ($2.80 billion) and NTT DOCOMO-Tata Teleservices ($2.70 billion).
In 2009, the global economic slowdown forced corporate India to look largely within the country for merger and acquisitions, as domestic deals accounted for about 60 percent of the $12-billion worth of deals.
INDIA INC TO SPREAD WINGS VIA TAKEOVERS
Ranjana Kaushal, New Delhi, February 15, 2010
Mail Today
At a time when the western world is looking at the growth in the emerging economies as a bailout from the recession, Indian companies have been aggressively pursuing their outbound merger and acquisition (M& A) deals. So much so that industry veterans predict domestic multi- national companies (MNCs) could gain prominent position in global landscape by 2015.
A study, conducted by Grant Thornton and Confederation of Indian Industry (CII), points out that by 2015, one third of the world’s top- 500 companies will be from emerging markets.
Said D. S. Brar, chairman, GVK Biosciences, “ In Asia, the gross domestic product (GDP) strength is shifting to India and China and I see this as a huge opportunity for companies.
This is a good time for companies to buy assets in developed markets. The assets firstly come at a low price and have huge technical leg- up. Companies can use these two advantages for expansion.” According to the study, there will be a graded shift of wealth and economic power from the developed to the emerging nations over the next two decades. The tilt has been reflecting in the figures of outbound investments from India starting 2006 when the figure of outbound investments stood at $ 9.1 billion compared to the inbound investments of $ 5.4 billion.
In 2008, the figures were $ 32 billion and $ 15 billion respectively. By the end of the decade, the share of emerging markets will increase to 40- 50 per cent of the global economy and markets, the CII- Grant Thornton report added.
In 2009, there were as many as 156 cross- border deals worth $ 5.26 billion compared to 174 domestic deals with an additional value of $ 6.70 billion. Cross- border deals account for 44 per cent of the total M& A deal volume and 47 per cent of the value in 2009.
Brar added, “ Sectors such as pharma, IT and automobiles will be front runner as far as outbound deals are concerned.
However, sectors namely hospitality and steel also have a huge potential.” The first half of 2009 saw 64 cross- border deals amounting to $ 1.42 billion while second half recorded nearly two and half times the value of the first half garnering $ 3.8 billion through 92 deals. The average value of inbound deal was $ 52.50 million and for outbound deals the figure was $ 16.78 million.
WIPRO EYES ACQUISITIONS IN HEALTHCARE, TELECOM SECTORS
Mumbai
Business Standard
Wipro today said it is scouting for acquisitions in the telecom, healthcare and energy utilities segment in the near future.
“We are looking out for acquisitions in niche segments like telecom, healthcare and energy utilities in the coming years. We will be growing through both organic and inorganic routes,” Wipro Joint CEO-IT Business Girish Paranjpe said on the sidelines of the Nasscom summit here.
He, however, did not specify the timeframe, amount earmarked or the geographies it was eyeing for acquisitions.
MPHASIS LOOKS OUT FOR MORE ACQUISITIONS
Thanuja BM, Mumbai
Financial Chronicle
Six months after buying AIG Systems Solutions (AIGSS), IT/BPO firm MphasiS is looking for more acquisitions. Company CEO Ganesh Ayyar said the company is pursuing a “string of pearls” strategy for acquisitions. “Basically, we are looking for small companies in the sub-$100 million category to give us market reach,'' he said.
The company says that while buyouts will be in any of the three areas it works in – applications, BPO and infrastructure technology outsourcing (ITO) – the verticals they are looking at are banking, capital markets, healthcare, insurance and telecom business support systems.
Ayyar said that the company has a small internal team working with external consultants in scanning the radar both in
At start of 2009, the company had a cash position of about $10 million, which has now grown to $200 million. The CEO opines that it gives us options and helps our strategy.
Unlike most other Indian IT firms, MphasiS has been very active in the acquisition space since inception. The company is also focusing on building platforms and component frameworks in the user experience segment.” A platform solution in healthcare was launched in previous quarter and more in different sectors are on the anvil,” Gopinathan Padmanabhan, president - applications, MphasiS.
ZENSAR TECH MAY GO FOR ONE BIG ACQUISITION BY SEPTEMBER
K.V. Kurmanath, Adith Charlie, Mumbai
The Hindu Business Line
Zensar Technologies will complete at least one $40-85 million acquisition by September.
“We are looking at companies in the
“We may go for one big ticket acquisition or go for two in the range of $40-$45 million,” he said.
It has completed the remaining of its planned investment through a fourth and final transaction of Rs 2,020 crore into Unitech Wireless.
Deal pipeline
Dr Natarajan, who was here to attend the three-day Nasscom meet, said the company was looking at companies in ERP support, infra-management, application support and tech help. Zensar would fall back on the Rs 160-crore surplus and borrow to fund the acquisitions.
He said the company has a $100-million deal pipeline, which include three-four deals with a size of $10 million. “We signed $25-30 million worth deals in the last two months,” he said. The company saw a revival in business growth from the
Hiring
He said the company was planning to hire 1,000 more people next year, taking the total number of employees to over 6,000. “We have added 200 in the last two months and there are 300 more openings this financial year. He said the hikes in the compensations had begun to happen again. From 6 percent last year, the average hikes grew to 8-10 percent this year.
Dr Natarajan said
“We are expanding to
RADIFINITY ARM JOINS ADITYA BIRLA MINACS TO START NEW UNIT
The Hindu Business Line
Bangalore-based technology solutions provider Radifinity's Physical Asset Management Services and Consultancy arm founders have been brought into Aditya Birla Minacs to start the similar practice under the Aditya Birla umbrella.
The founders along with key technical staff of Radifinity have joined Aditya Birla Minacs (ABM) to start the new business unit.
Radifinity was incubated at the N.S. Raghavan Centre for Entrepreneurial Learning of IIM-B.
The founders will bring their domain expertise, contracts and existing client relationships, while ABM will provide them a wider canvas in terms of global presence, Fortune 500 clients and access to Aditya Birla Group companies.
The new business unit will focus on delivering physical asset management solutions to customers worldwide by deploying technologies such as RFID, global positioning, wireless technologies such as GPRS, GSM and so on.
Jaideep Krishnan, Founder of Radifinity, said, “This is a great initiative on multiple levels. The infusion of asset management into Minacs' portfolio enhances Minacs ability to reach niche market sectors and provides a leg up in these sectors by enhancing The Managed Services armoire.
“Radifinity's management team gets a shot in the arm to leverage a larger platform and deliver solutions with a bigger thrust.”
MORE MERGER DEALS SEEN THIS YEAR
Kolkata, February 8, 2010
The Telegraph
The merger and acquisition (M&A) market is set to revive globally this year with the corporates’ appetite for deal-making increasing at a slow but steady pace.
A recent survey by global consulting firm KPMG revealed the same.
“The latest predictor numbers point to a slow but assured improvement in the global deals market over the next 12 months even though credit markets remain tight,” the report said.
Mirroring the trend in the global M&A space, India is also witnessing a jump in the quality and quantum of conversations around potential transactions, it adds.
According to Rohit Kapoor, head (corporate finance), KPMG India, “There is a guarded optimism in the boardrooms on inorganic growth initiatives and during the year we expect this to manifest into a healthier level of transactional activities.”
The domestic private equity space seems to have become active again, indicating deals will substantially increase this year.
“We are already starting to see a high volume of deal flow. Recovery in the domestic equity markets means private equity firms will continue to have concerns on valuation expectations and face significant competition from public markets,” KPMG head for private equity advisory, Vikram Utamsingh, said.
However, according to Dealogic statistics, the value of M&A activity worldwide fell 19 percent in January.
Faster growing regions such as Asia and Latin America show a rise in deal volumes, in contrast to the US and Europe.
Dealogic, which monitors M&A activity, said 2,637 deals were done in January 2010, down from 3,181 in the same period a year ago.
Healthcare is the leading sector for deal activity in January, followed by telecom, oil and gas.
GENPACT IN TALKS TO ACQUIRE INTELENET GLOBAL SERVICES
N Shivapriya, Mumbai
The Economic Times
Private equity investors in the country’s top back-office firm Genpact have initiated talks to explore a potential acquisition of Intelenet Global Services, at least two people familiar with the discussions said last week.
The talks are being held between financial investors at Genpact and Blackstone, which holds a little under 80% in Intelenet, one of the persons who spoke with ET on condition of anonymity, added. Genpact is the country’s largest BPO firm and has investments from private equity player General Atlantic and other investors, which hold nearly half of the firm. Intelenet is the country’s 14th-largest BPO firm.
The acquisition is of interest to Genpact because of the ability to derisk its revenues, which are still significantly dependent on its one-time parent, General Electric (GE), and consequently improve valuations, the person said. GE contributes around 40% of Genpact’s revenues. “Intelenet’s India business is the chief attraction to Genpact, but Blackstone is not willing to sell that alone,” the second person told ET. He said the potential transaction value could be $600-750 million.
Intelenet’s executive vice-president, Sandeep Aggarwal, said the information was incorrect and the company was not aware of it, and a senior Blackstone official responded to ET’s query saying: “I cannot comment on speculation.” A mail sent to Genpact did not receive a response till the time of writing. However, an executive with Genpact’s public relations agency said the company does not comment on market speculation and was also in the silent period ahead of its results.
Genpact, a late entrant to the India market, has not been very successful in scaling up its domestic business. Intelenet, on the other hand, has an established domestic BPO business under Sparsh BPO, an acquisition it made in 2006. Sparsh is listed on the domestic stock exchanges and had a net profit of Rs 48 lakh on revenues of Rs 61 crore for the September 2009 quarter, according to a BSE filing.
“Slowdown in the western markets has compelled internationally-focussed BPO firms to seriously evaluate risk diversification strategies. Focus will turn to markets that hold innate potential for size as well as growth,” said Alok Shende, principal analyst, Ascentius Consulting.
GE, which holds 18% in the company, is also said to be interested in exiting its holdings. Genpact’s GE business has been under strain and its substantial contribution to revenue has been a cause of concern. Reducing GE exposure and getting a foothold in the rapidly growing domestic market will fetch Genpact’s private equity investors, General Atlantic and Oak Hill Capital Partners, which are said to be keen on exiting, a better valuation.
