Xansa acquisition by Steria: India Focal Point

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"An India-strategy for a global company in the overall business plans takes precedence in its inorganic growth as well. A point highlighted in the acquisition by French IT services company, Groupe Steria of U.K.-based Xansa Plc ., which has more 5,000 employees in India out of its total headcount of 8,000." says Bundeep Singh Rangar, Chairman, IndusView Advisors, the India-focused cross-border advisory firm.

  

This acquisition will not only accelerate Steria among the top 10 IT Service providers in Europe but also give it access to Xansa's strong operations base in India with expertise in the public services and financial services sectors and combined revenue in excess of $2.4 billion.

 

"The acquisition also gives Steria the potential to expand in the Asian markets and the much needed muscle to compete with India's big three IT services companies, Tata Consultancy Services Ltd (TCS), Infosys Technologies Ltd and Wipro Ltd." explained Rangar.

 

"The deal follows the footsteps of the acquisition by Capgemini SA, Europe's biggest computer-services company of Rosemont, Illinois-based Kanbay International Inc., provider of IT services for banks and financial institutions for $1.25 billion in the last week of October 2006. The combined entity today has about 17,000 employees in India, representing 22% of Capgemini's total workforce." added Rangar

 

"The Steria-Xansa and the earlier Capgemini-Kanbay deal put other global IT services companies such as Electronic Data Systems Corp. (EDS), International Business Machines Corp. (IBM), Accenture and Computer Associates (CA) on notice, as these have the potential to shake important account/clients' renewals." said Rishi Sahai, Board Director, IndusView.

 

India's information technology (IT) and IT services industry became the most consolidating industry with 97 mergers and acquisitions (M&A) deals worth almost $3 billion last year. This year so far the sector has already witnessed 75 M&A deals, a growth of 22% when compared to the corresponding period last year worth more than a billion dollars in just half a year matching the deal making last year. Global companies spent more than $14 billion in this period acquiring Indian companies compared to just $3.4 billion dollars in the corresponding period last year. A fact that reinforces India as an important link to the growth of global companies.

 

India-Europe Corridor

Trade between India and Europe is expected to multiply five times to $100 billion by 2010 from current level of $20 billion, according to industry estimates. Propelling this growth is increasing merger and acquisition activity between companies in the two regions. Acquisitions by Indian companies in Europe accounted for 57% of the total acquisitions made overseas so far this year amounting to about $16 billion, up from just $4 billion in whole of last year.

 

Sourced From: IndusView Advisors Private Limited