Satyam Computers is on the prowl in the global market. The Nasdaq-listed IT services major is scouting for a third acquisition in the consulting space in the US and Europe, in line with its commitment to strengthen this vertical.
It is looking at spending anywhere between $50 million and $100 million for this buy.
Satyam had flagged off acquisitions in the consulting space in April 2005 when it took over business consulting firm Citisoft with presence in London, Boston and New York. The deal was valued at around $38.7 million. This was followed up with the company buying Singapore-based Knowledge Dynamics, a consulting solutions provider in the business intelligence space, in July 2005. That was an all-cash deal involving a consideration of $3.3 million.
“We are constantly looking at different opportunities for our inorganic growth. Companies in the enterprise business consulting space are on our radar as it will help strengthen our consulting vertical,” Satyam head (global marketing & communications) Hari Thalapalli told ET.
Satyam, which the fourth largest software exporter from India, is currently evaluating half a dozen niche players in this segment. The proposed move ties up with its strategy to offer integrated business solutions to customers. It is specifically looking at companies that will add value in expanding its expertise in enterprise resource planning (ERP) business solutions.
According to Mr Thalapalli, the company’s inorganic growth strategy would be on similar lines as that of its earlier acquisitions.
Consulting and enterprise business solutions account for nearly 41% of Satyam’s revenues. The company employs over 2,000 consultants in this segment. “We have a strong domain expertise and technology capabilities. Now our focus is to integrate these strengths to enhance our consulting revenues,” Mr Thalapalli said.
Satyam wants to weave its brand strategy with its inorganic growth plans so as to position itself as a complete business solutions provider that can add value to a customer’s requirements.
Satyam is also doing business intelligence services based on simulated models. This will help customers, particularly in the manufacturing segment, to analyse future market trends and make informed decisions. The company’s consolidated reserves and surplus stood at around Rs 5,974 crore at the end of the first quarter, this fiscal.
It also revised Indian GAAP guidance for 2007-08. After factoring in a dollar exchange rate at Rs 40.50, its revenue is expected to be in the range of Rs 7,853 crore to Rs 7,942 crore, an increase between 21.1% and 22.5%.
Source: Economic Times