Media & Tech Tuesday - Indian IT Services Companies Scouting Europe for Acquisitions

  • Apr 2013
  • Media & Technology

Despite continued economic uncertainty in Germany and France, these markets are becoming increasingly attractive to Indian IT Services players seeking to expand their global footprint, reduce dependency on North America and to diversify their revenue stream though existing clientele and a local work-force.

Until recently, Indian IT giants had been limiting their focus to the US, UK and the Nordic countries. But top Indian outsourcing companies such as Tata Consulting Services, Wipro, Infosys and HCL Technologies are now also looking at European markets, especially France and Germany. There are rumours of at least three acquisitions in the pipeline, two in Germany at under $50 million and another in France at a little over $100 million.

The past 18 months have already seen a series of major acquisitions completed in Europe:

  • In April 2013, Tata Consultancy Services bought French technology service company Alti SA, for €75m. “This acquisition underlines our long-term, strategic commitment to France, which is the third-largest IT services market in Europe. The acquisition of Alti SA will help us serve our clients in France and across Europe more comprehensively with an expanded set of services and solutions, bringing the best of TCS to French corporations,” said N Chandrasekaran, TCS CEO>
  • In January this year, Geometric acquired German-based electronic engineering company 3cap Technologies GmbH for about $15 million. “With this acquisition, we address two main needs of our customers – the ability to deliver embedded systems-based solutions and a stronger presence in Europe,” said Manu Parpia, MD and CEO, Geometric.
  • A month before that, Cognizant acquired six IT consulting and services firms of The C1 Group, one of the largest privately owned system integrators in Germany. With this acquisition, Cognizant plans to strengthen its local footprint in Germany and Switzerland and beef up its European presence.
  • In September 2011, Infosys acquired Zurich-based Lodestone Holding AG, a leading management consultancy, for £218m. The Bangalore-based company’s biggest acquisition will provide the company with a deep local expertise and wide ranging on SAP customer base. With over INR 200bn in cash on hand, Infosys will continue to look for acquisitions that fit with its strategic emphasis on platforms and software products.

Strategically, these deals are helping build presences in Europe to support existing operations, for example in the UK, where acquisitive appetite also remains strong.

We have an extensive track record of selling IT services companies to Indian strategic acquirers, including having sold:

  • Worldstone to Jersey Telecom (Telecom);
  • Quantix to Interoute (IT Services);
  • AVM on the Management Buy-out (Tele presence)
  • WCI Consulting to Take Solutions (BPO/IT Services);
  • Careline Services to Hinduja Global Solutions (BPO/IT Services); and
  • Dataforce Interact to HOV Global Services (BPO/IT Services).

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