Divestitures to Rule Deal Market, PwC Reports

Finance executives believe that corporations will over the next 12 months begin spinning off or selling businesses with increasing frequency. That was one of the findings of a survey title "Divestitures in Difficult Times" from PricewaterhouseCoopers Transactions Services.  Sixty-nine percent of the 215 private and public company executives surveyed in August and September anticipate similar or increased levels of divesture activity in the coming year as compared to the pervious 12 months. The trend will be driven by corporates looking to streamline their businesses by selling non-core assets.  Strategics will also lead activity on the buy side, according to PwC, as companies pursue targets "in order to strengthen their positions by filling a gap in their business models," said PwC partner Bryan McLaughlin.  The survey also confirmed what we've been hearing for sometime: That due diligence is taking longer. Seventy-two percent said the divestiture process has taken longer to complete in recent months, as buyers dig deeper to uncover potential liabilities and mitigate risk. "In this type of environment, you also have buyers who are suspicious that a divestiture may just be a simple way for companies to rid themselves of a problematic asset, which adds additional pressure on the process," said PwC partner Mark Ross.  Divesting will be driven in part by pent up demand. Thirty-five percent of respondents said they had delayed or deferred a sale this year because of difficult economic conditions. As markets and the broader economy stabilize, those sellers may move forward with those deals.  - Suzanne Stevens, The Deal.com Generation Equity Advisors, LLC Technology and Media Investment Banking Aaron Solganick Managing Director and President 8391 Beverly Blvd, Ste 480 Los Angeles, CA 90266 (310) 465-8940 direct asolganick@generationequityadvisors.com

Xerox acquires ACS, Dell just acquired Perot Systems....IT services M&A is hot

Two very large IT services industry M&A transactions were recently announced back-to-back......Xerox acquires Affiliated Computer Services Corp. for $6.4 billion (USD) and Dell Computer Corporation acquires Perot Systems Corporation for $3.9 billion (USD).   Both were deals that combined computer hardware and documents with IT services and outsourcing as more and more U.S. based firms are moving more and more to the services side of the IT business.

Shares of the major IT services companies practically all gained on Monday (9/28/2009), as merger mania appeared to draw more attention to the $806 billion IT services industry.

Some analysts think that the economic downturn is apparently giving some tech giants an opportunity to go shopping for companies that could give them expanded services capabilities, including different areas of business and IT consulting.

Large tech companies are currently making bold moves in the downturn to attach themselves to long-term revenue streams and to keep their customers longer.

We expect tech M&A deals to keep picking up steam for the next 12-18 months, along with IT services and enterprise software among the most active sectors. In addition, there are likely to be a few more "copy-cat" mergers similar to Xerox-ACS and Dell-Perot Systems that will most likely be announced.  CSC and Infosys are likely prospects for the next wave mega tech-services mergers.

IT Services Market and M&A Update, September 2009

IDC expects the strongest growth in IT services to come from outsourcing, as businesses look to improve operating efficiencies across the enterprise. Implementation services, on the other hand, are expected to slow as purchases of new hardware and software suffer from tight and delayed spending. On the other hand, global spending on IT could drop by 10 percent this year, according to Forrester. The plummeting spend will be felt across all areas of tech, with hardware suffering the most while outsourcing is expected to experience an 8.6 percent fall.

On the whole, we believe the remainder of 2009 will see an uptick in consolidation as companies become more comfortable opening their wallets to take advantage of the many still-discounted assets available across the sector. The mean enterprise value for IT Services M&A activity over the LTM dropped to $128.6 through June 30, 2009 compared with $240.3 in the same period last year, and at a more granular level, recent deal multiples contrast markedly with last year -- blended EV/Rev in Q2 2009 was 0.5x compared with 1.0x in Q2 2008. Quarter over quarter in 2009 the number of deals remained basically flat (49 in Q2 compared to 50 in Q1). Government-related transactions also continued to prop up valuations and deal activity. Aggregate deal enterprise value fell almost 76.5% to $352 million in Q2 2009 from $1.5 billion in Q1 2009, with the majority of Q1 2009 comprised of two deals -- Softbank IDC Solutions' $488 million acquisition by Yahoo Japan Corporation and Deloitte's $350 million acquisition of BearingPoint's public services sector.

A few trends that stand out in the IT Services sector are:

• Faltering businesses are selling. The very visible and ongoing breakup of BearingPoint was hard to miss over the past few months. As the bankrupt management and technology consulting firm continued operations and was actually winning large deals throughout its bankruptcy proceedings in Q1, PwC, Deloitte, CSC and Keane picked up BearingPoint assets at very attractive valuations. BearingPoint's commercial practice, public sector practice and NYC branch have been officially sold off and a deal is in the works for its Brazil operations. Deloitte scooped up the public sector practice for 0.3x revenue, PwC nabbed the commercial practice for less than 0.1x revenue, and CMA acquired the NY branch without disclosing details. Another famously faltering business, Satyam Computer Services, was sold in early April for $1.1 billion to Tech Mahindra, at a revenue multiple of 0.5x and an EBITDA multiple of 2.3x.

• Cross-border deals are on the rise. We've seen a lot of action in IT Services cross-border deals this year -- with 10 happening in the past three months alone. Examples include Sparxent, a provider of consulting and outsourcing solutions focused on the middle market, backed by vSpring Capital, which went shopping for two companies in Russia -- Arbyte and Rikkon. Exigen and Atos, both looking to expand their geographic footprint, picked up assets in China through their acquisitions of Taihoo and Shanghai Covics, respectively.

• Government is still an attractive vertical. In the first quarter we noted that the government was a very important IT services customer, and we've seen that manifest in M&A activity during Q2 with 7 federal government-related deals, 5 of which had backing of private equity investors, either directly or indirectly. This is also notable because there has been very little PE activity in any other IT Services subsector.

• Some services transactions are the result of companies divesting business lines to focus on core competencies. A number of companies offloaded non-core services units. Kroll, for example, sold its Government Services unit to Veritas Capital and noted that "the divestiture...is in line with Marsh & McLennan Companies' parent company stated intention to focus on core business offerings at Kroll and across the firm." ADP sold its retirement plan recordkeeping business to ExpertPlan in June, and Towers Perrin was busy spinning out both its SAP HCM practice to U.K.-based consultancy ROC Global and its Oracle/PeopleSoft HCM practice to CherryRoad Technologies.

Source: IDC, Forrester, Generation Equity Advisors Research

Digital Media M&A Update for 1H 2009

July 29, 2009

In line with market-wide M&A trends, both the volume and value of Media Industry transactions dropped sharply during the 1st Half of 2009 compared with the same period last year. In addition, the ongoing user-driven transition from traditional format to new media, which the industry has had difficulty monetizing, has compounded the effect of the global economic slowdown and resulted in a more marked decline in M&A activity than was seen in other Information industries.

The most active buyers in the Media Industry, in terms of volume of transactions announced for the 1st Half of 2009, were Time Warner, Inc. and Veronis Suhler Stevenson with 4 transactions each. These include Time Warner, Inc.’s acquisitions of Going, Inc., Patch Media Corporation, Midway Games Inc. and Snowblind Studios, and Veronis Suhler Stevenson’s acquisitions of HealthCommunities.com, Inc., Voyager Learning Company, Two Tradeshows from Technology Systems Corporation and Medical Education Partnership, Ltd.

The segment with the largest transaction • volume for the 1st Half of 2009 was Internet Media with 59 transactions.

In the 1st Half of 2009, there were 40 financially sponsored transactions with an aggregate • value of $2.58 billion. These figures represent 18 percent of the total volume and 49 percent of the total value, respectively.

One bright spot in the Media Industry was the Entertainment Content segment, where aggregate transaction value grew by 10% during the 1st Half of 2009 to $612 million, from $557 million in the same period of 2008. Interestingly, this increase was due in large part to a small number of high-value game development studio acquisitions. For comparison, M&A activity in Entertainment Content has historically been dominated by Film, Television, and Music Studio transactions.

Reflecting the transition from traditional to new media, the Internet Media segment continues to generate the most M&A interest, outpacing all other media industry segments in terms of the number of transactions announced in the 1st Half of 2009.

Media companies are embracing the evolution from a “publishing” model to a multi‐channel, increasingly digitized “consumer connection” model, delivering highly targeted, relevant content when and how consumers want to receive it. Additionally, in order to meet the evolving needs of CMOs, media companies are offering a complete advertising and marketing platform that combines marketing services, metrics and analytics. Measureable results to help clients build more meaningful relationships with customers and provide essential consumer data and intelligence are essential components, and this servicebased revenue provides an important diversification for ad‐driven models.

Technology M&A Update

Technology M&A Deal-Making Grinds to a Near-Halt…Except for Small Deals

For the first quarter of 2009, we witnessed a near halt in large M&A deals, including technology (globally).

The volume of technology mergers and acquisitions in the first three months of 2009 was just $8 billion, consisting of 625 deals — that’s down from $40.7 billion in the fourth quarter, comprised of 721 deals, and about $55 billion, from 835 deals, in the first quarter of 2008.

More striking, perhaps, was the lack of any technology M&A deals with prices above $1 billion during the quarter.

It was the first time in the seven years that The 451 Group has been tracking such data that no deal cracked the billion-dollar mark. (There’s already been one deal above that price — Fidelity National’s acquisition of Metavante Technologies — in the second quarter, however). The report suggests that, as with the broader M&A market, widespread economic uncertainty is causing much of the slump.

“As indicated by the dozens of companies that have scrapped their traditional practice of giving annual sales and profit guidance to Wall Street, there’s a tremendous amount of uncertainty about the outlook for 2009,” the report said. “Given that, few companies were willing to introduce additional uncertainty in the form a significant acquisition.”

Our additional research noted recent M&A transaction activity, including global technology, is down 50% year-over-year, down 60% compared to 2007, and down even more on a dollar-value basis. So far this year, only 6 out of roughly 400 M&A global technology transactions have had values of $100 million or greater.

On the technology financing front, there have been no follow-on offerings or IPOs, and there have been only 11 private investments in public equities (PIPEs) and 91 Private Placements of $5 million or greater YTD, as compared to 37 PIPEs and 190 Private Placements in the same time period last year.

We expect technology transactions for 2009 and the foreseeable future to be dominated by small (under $30 million) private placements, some PIPEs, very few IPO’s, and 90% of M&A transactions valued under $100 million.

The top 11 technology giants, such as IBM, Microsoft and Cisco, have only announced 8 deals YTD (compared to 16 at the same time last year).

The top 15 Financial Buyers of technology, such as Warburg Pincus and the Carlyle Group, have yet to do a deal this year.

Strategic and Financial Buyers have the cash for acquisitions and are attracted to the depressed valuations (public valuations have dropped over 50%), yet have been reluctant to deploy capital as these valuations have continued to fall.

Sellers are also reluctant to strike a deal given battered valuations and are generally opposed to relinquishing control (and their current income) during these turbulent times.

Global M&A Activity Lowest Since 2003 / Private Equity Deals Near Halted

The grand total of global buyout deals done in the first quarter was 523 compared to 1,055 for the first quarter of 2008. That’s the lowest number of deals in a quarter since 2003. It’s interesting to note that even in 2008 and the back half of 2007, deal volume topped 1,000 every quarter, until Q4 of last year, which saw 757 deals. The decline continues…

Private equity deals as a percentage of total M&A were at their lowest level since 2000 in the first quarter of ’09. Buyouts represented a mere 3.4% of all M&A this quarter, a number last seen in the Q2 of 2000. Our data goes back to 1985, and since then buyout deals as a percentage of total M&A has dipped below 2% just five quarters out of 96. Those instances happened between 1991 and 1994. It’s fallen below 4% in 27 of the 96 quarters. For context, the percentage of buyout deals as a percentage of the total hit record highs during the boom years, shooting up to 24.1% in Q4 of 2006.

Naturally, deal value saw another sharp drop this quarter. The value of buyout deals was $15.8 billion, down from $22.5 billion in Q4 and 76.3 billion in Q1 of 2008.

Global Software Spending will be flat in 2009

Worldwide enterprise software revenue will be virtually flat in 2009, rising only 0.3 percent from 2008, according to research firm Gartner. The enterprise software market, led by Microsoft, Oracle and SAP, has been weathering the current economic storm better than consumer software, and analysts feel the segment is well-positioned to ride out the remainder of the recession.

Worldwide enterprise software revenue will continue to be flat in 2009, growing at a miniscule 0.3 percent, according to research firm Gartner in a report issued on March 30.
In dollar amounts, Gartner forecasts that enterprise software revenue will hit $222.6 billion, compared to 2008 revenues of $221.9 billion.

U.S. business and government purchases of IT goods and services will decrease by 3.1 percent in 2009, compared with the 1.6 percent annual increase previously projected by Forrester Research. With the US economy dropping at an annual rate of 6.3 percent in Q4 2008 and most professional economic forecasters reducing their predictions for 2009 U.S. real GDP growth, Forrester has revised its forecast for technology spending in the U.S. to reflect these changes. Forrester expects growth in IT investment will resume in Q4 2009 and gather strength in 2010.
"In many ways, the biggest factor affecting the tech market is not the recession but the breakdown of the financial system," said Andrew Bartels, Forrester Research vice president and principal analyst. "The credit crunch is still causing companies to dramatically cut back on all forms of capital investment, including many IT goods and services, and this will affect 2009 revenues for most IT vendors."

Forrester uses several metrics to determine the health and size of the IT market on a quarterly basis. The data in the new Forrester forecast report focuses on IT purchasing -- how much computer and communications equipment, software, IT consulting and integration services, and IT outsourcing businesses and governments buy from technology vendors. It is one of the most important metrics for evaluating the health of technology vendors.

2009 U.S. IT Spending Outlook by Sector

The new Forrester forecast report makes the following predictions:

• Computer equipment will fall even more in 2009. Forrester expects that US business and government purchases of computer equipment will drop by 6.8 percent in 2009, on top of a 4 percent decline in 2008. However, growth is expected to bounce back in 2010 to 7 percent.
• Communications equipment demand will shift from 2008 growth to a big cut in 2009. A mixture of enterprise demand for videoconferencing and mobile technologies and telco demand for 3G wireless and broadband equipment kept purchases growing by 3.7 percent in 2008. Both factors will erode in 2009, leading to a 7.8 percent decline, but growth will revive modestly in 2010 to 4.8 percent.
• Software purchases will decline slightly in 2009, with license revenues falling. Since about half of software purchases each year are maintenance fees and subscription fees that grow at relatively constant rates, the flat growth of total software purchases means that license revenues will continue to fall in 2009. The picture will improve in 2010, with growth of 6.3 percent.
• IT consulting and systems integration services will slip in 2009. Cutbacks in the project portfolio of most companies will lead to a decline of 2 percent in 2009 for IT consulting and systems integration services. The outlook for 2010 remains positive, with 7.4 percent growth expected in 2010.
• IT outsourcing growth will remain moderate in 2009 and 2010. IT outsourcing turned out to be weak in 2008, with 2.8 percent growth as economic uncertainty froze potential clients, increased competition and smaller-scale projects cut prices, and the recession caused prospects to wait to see if prices would get even lower. These same forces will continue through the first half of 2009, with revenues starting to improve in the second half of 2009 and in 2010. Growth in 2009 will be small but positive at 2.1 percent, improving to 6.8 percent in 2010.

"There is a light at the end of the tunnel -- demand has been delayed but not cancelled," said Bartels of Forrester Research. "Growth will come back strong once the recession and tight credit conditions start to ease, so IT Vendor Strategy professionals should get prepared by investing in research and development and focusing on building the proof points, case studies, and success stories about how their technology solutions have helped businesses."

Recent M&A News and Announcements

April 6, 2009 (Bloomberg) - Cisco Systems Inc. is ready to pick up the pace of mergers and acquisitions over the next year after the valuations of technology companies slumped, said Ned Hooper, the company’s top dealmaker.

“We will be active -- not hope to be -- will be,” Hooper, Cisco’s senior vice president of corporate business development, said in an interview. “We continue to use M&A as a key part of our growth strategy. The downturn for us is a big positive.”

Few Silicon Valley companies have made more acquisitions than Cisco, the world’s largest maker of networking equipment. The company has bought about 130 businesses in its 25-year history, using them to enter new markets, such as cable set-top boxes and wireless routers for the home. Cisco bought 11 firms in 2007 and five in 2008.

“The pace has slowed a bit as we make sure we do the right deals,” Hooper said. “We expect to be active over the next 12 months.”

Chief Executive Officer John Chambers said in February that he plans to use Cisco’s $29.5 billion in cash to make purchases. Last month, Cisco bought Pure Digital Technologies Inc., the maker of the Flip Video camcorder, for $590 million in stock.

“Bigger companies are saying these are times you gain market share and consolidate your position,” said Sarah Friar, an analyst at Goldman Sachs Group Inc. in San Francisco. “It’s the perfect time to sidestep competitors that don’t have the size to make these moves.”

April 6, 2009 (Bloomberg) - International Business Machines Corp., the world’s largest computer-services company, was in discussions last week to buy Sun Microsystems Inc. for $9 to $10 a share. The talks fell apart over the weekend because Sun officials said the price was too low, a person familiar with the matter said. Oracle Corp. stepped in a few days later and announced the acquisition of Sun Microsystems, which likely hurts both IBM and SAP (its competitors).

The boards of most companies are telling their merger-and- acquisition teams to go slow, said Pete Bodine, managing director of Allegis Capital, a Palo Alto, California-based venture-capital firm. Suitors are waiting for prices to drop further, while some acquisition targets are holding out for the kind of prices they used to command.

“There’s no force compelling anyone to get into the checkout line,” Bodine said. “Everyone is just pushing the empty cart up and down the aisle.”

Acquisitions of technology companies in the U.S. fell 82 percent to $2.2 billion in the first quarter of 2009 from a year ago, according to data compiled by Bloomberg. The number of purchases announced fell to 206 from 337.

Chambers has said he wants to acquire companies with products that help people work together, as well as businesses in digital video and so-called virtualization -- software that helps manage computer servers. Cisco, based in San Jose, California, is also pushing further into systems for data centers, the vast rooms of computers that store company files and information.

That focus may make BMC Software Inc., a Houston-based enterprise-software maker, an acquisition target for Cisco, UBS AG analysts wrote in a March 23 note. NetApp Inc., a maker of storage computers, may also be a takeover candidate, UBS said.

April 6, 2009 (Associated Press) - SupportSoft to sell enterprise business to Consona.
SupportSoft Inc., a provider of computer support services, said it has agreed to sell its enterprise business to privately held Consona Corp. for $20 million in cash. SupportSoft's enterprise business has been shrinking while its consumer business, anchored by Support.com ( SPRT - news - people ), is growing, but the enterprise business still accounts for two-thirds of the Redwood City-based company's revenue.

"The transaction enables us to become a pure play provider of technology enabled services for the digital home and small office," said Josh Pickus, chief executive of SupportSoft, in a statement. Indianapolis-based Consona provides customer relationship management and enterprise resource planning software and services. The assets bought from SupportSoft will be part of the CRM group. The deal is expected to close during the second quarter.

SupportSoft said it expects to post enterprise revenue of $6.8 million to $6.9 million for the first quarter. That's down from $9.7 million in the fourth quarter and $10.9 million in the first quarter last year. Meanwhile, SupportSoft expects to post consumer revenue of $3.5 million to $3.6 million for the first quarter, up from $3.1 million in the fourth quarter and $703,000 in the first quarter of 2008. In total, SupportSoft said it expects revenue of $10.3 million to $10.5 million for the quarter that ended March 31, up from an earlier estimate of $9.5 million to $10.3 million.

March 23, 2009 (CNet News.com) - Oracle announced plans to acquire Relsys, which develops drug safety and risk management applications. The acquisition, which is expected to close by June, is designed to bolster Oracle's Health Sciences Global Business Unit, formed last summer. Health sciences is one of a number of industry sectors into which Oracle is delving via a buying spree.

Relsys develops applications designed to aid drug, biotech, and medical-device companies in streamlining their operations, adhering to regulatory compliance and improving the safety of their products.

With the acquisition, Oracle aims to provide its customers with the ability to identify safety risks earlier in the development cycle, as well as improvements in tracking the performance of their products after they hit the market. Financial terms of the deal were not disclosed.

March 12, 2009 (NY Times) - The sale of Satyam Computer Services may be one of the more bizarre corporate auctions.

The Indian government and a new corporate board, scrambling to save Satyam from bankruptcy or dissolution, asked bidders interested in buying a 51 percent stake to make themselves known by Thursday night, even though the company’s numbers are in flux and its future uncertain.

By Thursday afternoon, a few potential bidders had raised their hands, including the Indian engineering company Larsen & Toubro; the Indian telecommunications company Spice; and Tech Mahindra, a venture of Mahindra Group and BT Group of Britain.

Although other bidders may step forward, the deal has not attracted big-name foreign buyers or private equity firms. Whoever does seal a deal may get a bargain, some analysts say.
Satyam’s market capitalization on the New York Stock Exchange was $7 billion last May; it is now slightly more than $600 million. Satyam’s co-founder said in January that he had made up $1 billion in cash and inflated numbers on the balance sheet. Satyam, the fourth-largest Indian outsourcing company, claims some 53,000 employees, but those numbers, sales and profits, are under review.

Spice’s chairman, B. K. Modi, told The Times of India that he thought the lawsuits could cost $440 million to $840 million, but analysts in the United States say those figures might be high.
The situation may make closing a deal extremely difficult.

March 5, 2009 (RTT News) - Gevity HR, Inc. (GVHR: News ), a provider of human resource outsourcing services, said Thursday it signed a definitive agreement with privately held TriNet Group, Inc., pursuant to which TriNet will acquire all of the outstanding common stock of Gevity in an all-cash transaction valued at $4.00 per share.

The cash value of the proposed deal represents a premium of approximately 97% over the Gevity HR's closing stock price on March 4, 2009.

The transaction is expected to close in the second quarter of 2009 subject to the approval of Gevity's shareholders. Gevity's largest shareholder, ValueAct Capital Management, LP, has agreed to vote its shares in favor of the merger transaction.

Gevity's chairman and chief executive officer, Michael Lavington, said, "The Company's board of directors has concluded a lengthy evaluation of numerous strategic alternatives to enhance shareholder value and has concluded that joining forces with TriNet is in the best interests of our shareholders. We believe the new organization created by this merger will build upon the complimentary strengths of both companies to provide superior value for our clients, employees and all stakeholders."

The San Francisco Bay Area-based TriNet Group, Inc. is a privately held provider of human resource outsourcing services for small businesses. TriNet's largest shareholder, General Atlantic, LLC, a global growth equity firm, also owns approximately 9.5% of Gevity's outstanding common stock.

Upon closing the transaction, the combined companies will be privately held and will operate under the leadership of TriNet president and chief executive officer Burton Goldfield.

Additionally, the Bradenton, Florida-based Gevity announced a cash dividend of $0.05 per share of common stock payable on April 30, 2009 to shareholders of record on April 16, 2009.

Jan 23, 2009 (ZD Net) - Xactly announced it has completed the acquisition of Centive, its closest pureplay SaaS rival in the sales performance management sector. The all-stock deal almost doubles San Jose-based Xactly’s revenue and customer base, and had first been discussed by the two CEOs as much as a year and a half ago, Xactly’s CEO Chris Cabrera told me this morning. Having eliminated the distraction of competing with each other, the combined company will now be able to focus on winning market share from conventional and hybrid-SaaS competitors such as Callidus Software. “We think that by taking the only two 100-percent SaaS companies in the game and making them one, we make it easier for our customers to choose,” said Cabrera.

When asked whether current economic conditions had played a part in crystallizing the acquisition, Cabrera was at pains to assert that both companies had been doing well independently. “Both companies had a very good Q4 — our space is doing very well,” he said. “By combining these two companies together we come so much more of a strong competitor.” New Centive customers in 2008 included over 1000 seats at a division of Motorola, and several hundred seats each at Flowserve, Honeywell, Intergraph, Parametric and WebSense, while Xactly recorded notable wins at 3Com, NTT America, Omniture, PayPal, Rackspace, TIBCO and others. The combined company now has “well over 200 customers” said Cabrera.

“Size really matters in the SaaS world,” he added, noting that the acquisition will bring operational savings as back-office functions are merged, helping reduce costs as a proportion of revenue — although the company will retain a significant presence in New England, where Centive has its headquarters. “Doubling in size helps us get there much more quickly,” said Cabrera. “This really was a no-brainer from a financial point of view.”

Convergence of the two product sets won’t begin until the company has had time to evaluate how best to bring them together. Although there’s inevitably a great deal of overlap, there are areas of functionality that are unique to each and so it won’t be a case of completely eliminating one product, as has been seen in some other SaaS acquisitions recently. Xactly will also be seeking to preserve and build on Centive’s OEM partnership with ADP, which has brought in contracts ranging from 70 to 650 seats since it was announced in late 2007.

The combined company has significant venture capital backing. According to peHUB, Xactly has raised $60 million since 2005, while Centive has raised over $96 million in the past ten years, although MassHighTech notes that $80 million of that sum predates a recapitalization that took place in 2005, prior to Centive selling off its on-premise software business to private equity investors.

Jan 1, 2009 (Channel Insider) - Tata Buys Citigroup's Tech Services Group for $512 Million
TATA Consultancy Services (NYSE: TCL), India‘s largest software services firm, acquired Citigroup Global Services, the India-based business process outsourcing unit and subsidiary of U.S.-based financial services giant Citigroup.

Citigroup will receive $512 million in cash. The two sides first announced the deal in October, when they also inked a $2.5 billion contract for Tata to provide outsourcing services to Citigroup and its affiliates for the next decade.

This acquisition gives us the ability to offer an end-to-end, domain-led third-party solution for business operations to our large financial services clients. We will also work to create platforms for the future and integrate our strong domain expertise in operations along with our suite of products for the financial services sector” said N. Chandrasekaran, chief operating officer and executive director at Tata.

The sale is expected to help reduce Citigroup’s operating expenses related to business processing and increase focus on their financial services competencies. It is anticipated that Citigroup will recognize a reduction of more than 12,000 jobs, most based in India.

Venture exits were the slowest in five years for 2008

Hopefully a little New Year’s Eve champagne helped soften venture capitalists’ view of 2008. But when they return to their offices, U.S. VC’s might heave a sigh of relief when they turn their calendars to 2009.

That’s because 2008 was the slowest in five years for initial public offerings and merger and acquisition exits. Dow Jones VentureSource confirmed that bad news in its quarterly study of venture liquidity.

Venture-backed companies generated $24.1 billion in liquidity via IPOs and M&A in 2008, a 58 percent decline versus $57.6 billion the prior year. M&A also fell sharply, dropping 54 percent to $23.5 billion in deals for 325 venture-backed companies. The $3.9 billion of M&A activity for 65 companies in the fourth quarter was the lowest quarterly transaction number in nine years.“Overall, the median amount paid for a VC-backed company in 2008 was roughly $45 million—half of the median $90 million paid in 2007,” Jessica Canning, global research director for VentureSource, said in a statement. “Since the fourth quarter of 2007, we’ve seen the median acquisition price drop steadily from quarter to quarter in lock-step with the decline of M&A transactions.”The top fourth quarter M&A deal was eBay’s $945 million acquisition of online transaction firm Bill Me Later, while the No. 1 deal of the year was Dell’s $1.4 billion of Equalogic, a data storage company.Among the companies that mounted an IPO in 2008, the median amount of venture funding fell 19 percent to $56 million. The median period it took companies to reach liquidity climbed to 8.3 years versus 7.2 years in 2007.


Source: RedHerring.com

Wall Street is Crashing....What's Next for Technology Mergers?

Current Global Technology M&A Environment

by Aaron Solganick, Managing Director and Co-Founder of Generation Equity Advisors LLC

Okay, so we are facing a bit of doom and gloom these days. Wall Street is crashing and the US Congress finally passed the $700 Billion (USD) financial bailout legislation last week. As investor anxiety deepened despite the bailout package, the Fed announced that it would double its auctions of cash to banks to as much as $900 billion, pay banks interest on reserves and consider further actions as needed. In clogged credit markets, the London interbank offered rate, which banks charge one another for overnight loans, shot up in midday trade to 2.37%, from Friday's close of 2%. However, in a sign of mild improvement, the rate for three-month loans fell 5 basis points to 4.29%. Stock markets fell across Europe on fears that the financial crisis was accelerating and that European governments' uncoordinated response would leave the regions' lenders vulnerable. The increasingly drastic steps being taken by the U.S. and European Union don't appear to be having a significant effect on the psyche of bankers who have all but ended lending to each other, thereby freezing credit markets.

Where do we go from here?
Now What?
How does it effect technology M&A?

From a macro-level view, the technology industry is still alive and kicking, although slowing (in some ways).

Forrester Research cut its 2009 U.S. technology spending growth forecast to 6.1 percent from 9.4 percent, the research group said on Tuesday, but raised its 2008 growth forecast to 5.4 percent from 3.4 percent.

The economic slowdown Forrester expected in the first half of this year is now expected in the second half of 2008 or the first half of next year. "(This) means that total U.S. IT (information technology) spending for 2008 will be more robust than we first predicted, but that an expected recovery in 2009 will be postponed," Forrester said in a statement.

According to Capital IQ, deal flow in the technology sector has approached $119.32 billion and 3,666 for YTD 2008, versus $205.54 billion and 3,846 for the same period last year.

Capital IQ also reported that multiples, including Total Enterprise Value (TEV) to Revenue averaged 1.28x and the TEV to EBITDA averaged 8.47x for the trailing-twelve months ending Sept 30, 2008. As for the latest period (Q3 2008) the average technology deal equaled a TEV / Revenue of 1.23x and a TEV / EBITDA of 7.77x, a slight drop overall.

There are still many good opportunities for both buyers and sellers in the potential slowdown. If you've got a good quality company, it's a wonderful time to sell. Private equity will have a flight to quality and still currently has a ton of money they need to use and place it before the end of the year. For lower middle-market transactions that are not reliant on the credit markets, the environment is still decent overall.


“IPOs Hit a 30-Year Low”

In Silicon Valley, investors believe technology firms will survive the economic meltdown, but they’re concerned about the lack of IPOs. There were zero IPO’s completed by venture backed companies in the second quarter of 2008. It's the first time since 1978 that the industry posted a goose egg, and it represents a huge drop from the 25 companies that went public during the same period in 2007. The latest data have the National Venture Capital Association warning of a "capital markets crisis." NVCA president Mark Heesen is also concerned that the total value of merger and acquisition deals, another key outlet for VC-backed companies, was 40 percent less in the second quarter than in the same period in 2007.

Not that everyone didn't see it coming, but guess what? The third quarter stank for venture capitalists seeking to reap the rewards of their investments. In fact, it was the worst period in five years for VC exits. So says new data from Dow Jones VentureSource.

According to the stats, VC-backed companies generated $4.57 billion in liquidity for their backers via initial public offerings or M&A. That's a 66% drop from the year-earlier period. There were 66 acquisitions worth $4.4 billion; the lone IPO was the $153 million debut of Rackspace Hosting Inc. That said, the median time until a VC-backed company gets bought has stretched to 6.1 years, while the price fetched has nearly been halved compared to last year. Ouch.

At its recent meeting in Silicon Valley, the National Venture Capital Association announced it will organize task forces of financial experts to come up with solutions for reviving the IPO market and present the ideas to the new White House Administration after the first of the year.

Meanwhile, we attended the recent annual Oracle OpenWorld conference and learned that Oracle president Charles Phillips suggested that over the next five years, the level of acquisition activity could be similar to what Oracle has accomplished in the past 44 months, which amounts to several Billion dollars in M&A spending. "We have access to innovation around the world because of our balance sheet and acquisition strategy." In a sense, he said, Oracle "is the IPO market for the software industry." Oracle builds on its enterprise software solution which includes databases (where its an industry behemoth), middleware and applications.


Enterprise Software Industry M&A Summary for Q3 2008

The Software industry sector remained active for Q3 2008 with a tilt towards the major software houses claiming the bulk of the number of acquisitions (and buyers).

Most recent Enterprise Software M&A transactions announced in Q3 2008 include:

Oct 6, 2008 - Document-capture software provider Kofax has acquired electronic invoice and document-processing software company OptiInvoice Digital for 2m euros ($2.71m) cash with further conditional payments in the range of 1.31m euros ($1.77m) to 10m euros ($13.6m) over four years. OptiInvoice Digital, which is headquartered in Stockholm, Sweden, develops software that allows electronic invoices and other documents to be digitally encrypted and transmitted through email and other data streams in standard text, image, and XML formats, eliminating the need to print, mail, receive, and process paper-based documents.

Oct 3, 2008 - Oracle has acquired UK-based 3D retail software provider Advanced Visual Technology for an undisclosed sum. AVT's products enable retailers to design and plan retail floor space in real time with a current photo-realistic view of each store. On completion of the deal, AVT's employees will join Oracle's Retail Global Business Unit. Duncan Angove, senior vice president and general manager at Oracle Retail, said: "Adding AVT to our portfolio of retail applications further builds on our strategy of providing broad and deep industry solutions that help transform the economics of retail businesses. This will help enable retailers to gain rapid and profitable ROI from every inch of store space and help Oracle further realize its vision for insight-driven retailing."

Oct 1, 2008 - US-based private equity firm Bedford Funding has acquired talent management software provider Authoria for $63.1m. The firm, specializing in investments in the software and IT services sectors, will make an additional $8m investment in Authoria to enhance its marketing and sales initiatives and accelerate overall corporate growth.

Sept 23, 2008 - Cisco has agreed to acquire open-source instant-messaging start-up Jabber for an undisclosed sum to enhance its unified communications and collaboration product portfolio. Colorado-based Jabber provides a messaging platform that supports different devices, users, and applications and allows collaboration across Microsoft Office Communications Server, IBM Sametime, AOL AIM, Google, and Yahoo.

After the acquisition, Jabber will become a part of the Cisco Collaboration Software Group (CSG). Cisco said the acquisition will allow it to incorporate Jabber’s presence and messaging services in the network and offer aggregation capabilities to users through both on-premise and on-demand applications across multiple platforms including Cisco WebEx Connect and Unified Communications.

The acquisition is part of the company's "build, buy, and partner" strategy to move into new markets and capture key market transitions. Earlier this month, it acquired e-mail and calendaring software provider PostPath for $215m. Other recent acquisitions by the company include WebEx, IronPort, and Securent.

Sept 18, 2008 - Netherlands-based multimedia company Wolters Kluwer has acquired German tax software provider Addison Software from European private equity investor HgCapital for approximately 200m euros ($284m). Addison provides software applications for tax advisers, CPAs, and medium-sized companies. It generated 48m euros ($68.2m) revenue in fiscal 2007 and has over 340 employees.

This is the third acquisition by Wolters Kluwer this year. Earlier this month, it acquired electronic clinical information company UpToDate to strengthen its health portfolio. In March, it acquired the accountants division of MYOB UK and MYOB Ireland to expand its presence in the UK market.

Sept 16, 2008 - Enterprise systems management software vendor Quest Software has acquired NetPro Computing, a provider of optimization tools for Microsoft environments, for $78.7m. Quest said the acquisition will enable it to offer products to migrate, manage, and secure Microsoft Active Directory, Exchange, SharePoint, and SQL Server environments. It plans to retain key members of NetPro's management team and will continue to offer products from both companies independently. The companies are expected to announce the roadmap for new products on October 15. The acquisition follows Quest's January purchase of PassGo and last year's acquisition of Windows-based lifecycle management software developer ScriptLogic for $90m.

Sept 8, 2008 - Enterprise content management software vendor Open Text has acquired document-centric process automation software provider Captaris for $131m. Captaris provides document and data capture applications, as well as business information and delivery applications built on Microsoft's .NET framework that integrate, process, and automate the flow of content. Waterloo, Canada-based Open Text said Captaris's offerings will be integrated with its invoice management applications that work with SAP and Oracle.

In March, Bellevue, Wasington-based Captaris rejected a $4.75-per-share offer by private-equity firm Vector Capital. Open Text offered $4.80 per share.

John Shackleton, president and chief executive at Open Text, said: "Captaris's technology will strengthen Open Text's ECM solutions by providing another on-ramp for integrating content into our ECM solutions. We are committed to continuing Captaris's products, and partner and customer support."

In July, Open Text also acquired eMotion, a provider of hosted business applications for managing digital media assets and marketing content, and Spicer that specializes in file format viewer applications for desktop applications, integrated business process management systems, and reprographics.

Sept 4, 2008 - Oracle has agreed to acquire ClearApp, a provider of application management products for composite applications built on SOA platforms. Financial terms of the acquisition, which is expected to close in the second half of 2008, were not disclosed.

ClearApp's products identify potential problems in the code of an application and how the problem can affect other applications. The company's software works with Oracle's Enterprise Manager product line and IBM's WebSphere. Leng Leng Tan, vice president of applications and systems management at Oracle, said: "As customers deploy more SOA-based applications, the task of effectively managing them becomes paramount. With the addition of ClearApp's technology to the Oracle Enterprise Manager product family, our customers are expected to get continuous and uninterrupted top-down views of their business services and applications, helping them maximize service availability while reducing IT operations costs."

This is the seventh acquisition by Oracle this year. It acquired 11 companies last year.

Aug 21, 2008 - Salesforce.com has paid $31.5m to acquire InStranet, a provider of knowledge management technology for call centers. InStranet categorizes customer information into data dimensions, such as their geographic location and the specific products they have purchased.

Salesforce.com said the acquisition will enable it to expand its Salesforce CRM Customer Service & Support portfolio and will also add approximately 350,000 global call center agents. It will continue to support InStranet customers and will integrate InStranet's management team and employees into the company.

Marc Benioff, chairman and chief executive at Salesforce.com, said: "We're excited to add this unmatched technology to our SaaS applications and Force.com platform. Not only will it make our service and support offering stronger for our customers and further their success, it will help catapult our growth in the customer service and support space."

Aug 12, 2008 - JDA Software has agreed to acquire supply chain management software and services provider i2 Technologies for $346m. Hamish Brewer, chief executive at JDA, said: "By acquiring i2 we double our addressable market in manufacturing to include discrete manufacturing, complementing our current market leadership in process manufacturing and strengthening our retail and transportation management presence."

JDA said it expects the acquisition to produce annual cost savings of approximately $20m.


Most recent Security Software M&A transactions announced in Q3 2008 include:

Sept 24, 2008 - California-based security software company McAfee has agreed to acquire Secure Computing for approximately $465m to expand its network security product portfolio and customer base. Secure Computing provides network security products including Webwasher that filters corporate web traffic, Ironmail encrypted mail servers, Sidewinder firewall appliances, and SnapGear virtual private network (VPN) devices to businesses of all sizes.

Upon completion of the acquisition by the end of the fourth quarter, Secure Computing’s technologies will be integrated into McAfee’s Network Security product business unit and will be headed by Secure Computing’s current president and chief executive Dan Ryan. McAfee said the acquisition will strengthen its position in security risk management (SRM) and will enable it to provide a complete network security portfolio including intrusion prevention, firewall, web security, e-mail security and data protection, and network access control.

The acquisition follows the company’s August acquisition of risk management tools provider Reconnex for $46m. Last year, it acquired Israel-based data protection company Onigma for $20m and encryption and access control vendor SafeBoot for $350m.

Dave DeWalt, chief executive and president of McAfee, said: "We expect the pending combination of McAfee and Secure Computing will create annual projected combined revenue of just under $500m in the network security segment of our SRM portfolio. We believe that this pending acquisition will allow us to immediately establish a leading and highly competitive position in the network security space."

Sept 24, 2008 - California-based networking equipment vendor Netgear has agreed to acquire integrated security appliances firm CP Secure for $17.5m to enhance its security applications portfolio for SMBs. As per the deal, the company will pay $14m in cash for China-based CP Secure's assets and an additional $3.5m following closure of the acquisition. CP Secure has an engineering center in Nanjing, China, and provides integrated security applications to protect organizations from internet-originated web and e-mail malware threats. As part of the acquisition expected to close in the fourth quarter, the company will acquire all the pending patents, proprietary technologies, customer base, current products, and products in development.

Aug 20, 2008 - Security and storage software company Symantec has acquired for an undisclosed sum Australia-based PC Tools, which provides privacy and security software for Windows users. On completion of the deal, which is expected by the end of the year, it will continue offering its products under the PC Tools brand and maintain separate operations within Symantec's consumer business unit. Simon Clausen, chief executive of PC Tools, will lead the operation and will report to Janice Chaffin, president of consumer products at Symantec.

Symantec said the PC Tools' PC utilities software and point security technologies will enable it to expand its reach in emerging markets with an array of go-to-market capabilities. Symantec's Chaffin said: "The combination of our two companies will provide additional value and choice for consumers worldwide to better enable and protect their digital life. By adding PC Tools, we build on the market-leading success of Symantec's consumer offerings and firmly position ourselves for continued incremental growth in a rapidly expanding market."

Earlier in August, Symantec also acquired nSuite Technologies for an undisclosed amount.

July 30, 2008 - Endpoint security and control software vendor Sophos has announced plans to acquire German enterprise data security applications provider Utimaco Safeware for 217m euros ($340m). As part of the acquisition, Sophos has acquired Investcorp Technology Partners' 24.99% stake in the company.

It said Utimaco will become a new Sophos business unit focused on data security, and Utimaco's SafeGuard brand will be retained. Steve Munford, chief executive at Sophos said: "Companies of all sizes are looking to protect against both external and internal threats, with one manageable solution. Integrating endpoint protection, network access control, and encryption provides us with a great platform for innovation as the market continues to focus on securing and controlling information."

The acquisition is expected to be completed in October.


IT Services M&A Summary for Q3 2008

The IT Services industry sector remained active for Q3 2008 with a tilt towards Europe and India claiming the bulk of the number of acquisitions (and buyers).

Most recent IT Services M&A transactions announced in Q3 2008 include:

September 30, 2008 - India-based IT services company HCL Technologies has made a counter bid for UK-based SAP consultancy Axon Group for approximately 441.1m pounds ($810.8m), in response to Infosys’ offer of $753.1m. HCL said the acquisition would complement its application and infrastructure management capabilities, as well as expand its customer base. In August, Infosys Technologies made a cash offer of 407.1m pounds ($753.1m) for Axon to expand its consulting practice. HCL’s counter offer is at an 8.3% premium over Infosys’s offer. Axon employs approximately 2,000 people and serves customers across the UK, North America, and Asia, and reported net profit of 20.2m pounds ($37.4m) on revenue of 204.5m pounds ($378.3m) for fiscal 2007.

September 24, 2008 - US-based systems integrator Ciber has agreed to acquire India-based IT services provider Iteamic for an undisclosed sum to expand its Indian operations. Iteamic, with approximately 200 employees, manages projects off-shored by US companies and expects its fiscal 2009 revenue to be between $7m and $8m. The acquisition, to be closed in 30 days, is expected to expand Ciber's capabilities to handle off-shored projects from the US and Europe.

September 23, 2008 - US-based private equity firm Providence Equity Partners and Manila-based conglomerate Ayala have announced the acquisition of Philippines-based outsourced services vendor eTelecare Global Solutions for $290m. Under the deal, Ayala's BPO investment affiliate LiveIt which already holds 22% in eTelecare, will acquire up to 100% of its outstanding common shares. eTelecare provides BPO services for voice-based and non-voice-based customer care from delivery centers in the Philippines, North America, and Latin America. It currently has a headcount of 10,000 with 2,000 based in Arizona.

September 22, 2008 - India-based IT services provider HCL Technologies has announced plans to spend as much as $2bn to acquire companies in the US or Europe by 2011. The company has identified a three-fold acquisition strategy: intellectual property acquisition, geographic acquisition, and transformation acquisition, in its aim to be among the top three global vendors by 2011. The company is looking for acquisitions of $100m or less to acquire intellectual property for the company. It is also planning acquisitions in Japan and Germany to expand its geographic reach. It recently announced plans to acquire three to four captive BPOs in the Asia-Pacific region, specializing in banking and financial services. The company has close to $600m in cash reserves.

September 17, 2008 - Spanish IT services provider Telvent has acquired US-based DTN Holding Company for $445m to strengthen its position in the business information services sector. The transaction is expected to close in the fourth quarter. Telvent said DTN provides information services to the agriculture, energy, and environment industries and expects revenue of $180m for fiscal 2008. Telvent will gain access to DTN's library of proprietary content and solutions, and a real-time data delivery platform. DTN's management team will continue to run the company.

September 16, 2008 - Netherlands-based IT services provider Ordina has acquired Belgian SAP specialist E-Chain Management for an undisclosed sum. Ordina said E-Chain has been providing SAP-based business automation services since 2001, and generated revenue of approximately 13.6m euros ($19.4m) in 2007. Bart Embrechts, director of E-Chain Management, said: "Joining Ordina will allow us to capture a larger slice of the Benelux market. What makes our joining forces especially interesting is Ordina's specialization in application outsourcing. From now on, we can offer a comprehensive service range, including wider technological expertise and solutions development." It is the latest of several acquisitions by Ordina in its bid to dominate the Belgian ICT market by 2010. Since 2005, it has acquired numerous SAP and ICT specialists including Infra Design, Solidium, Vertis, Magentis, IBAS Group, EVO-Soft, Be Value, Bergson, Wisdom, and Iterum Services. Last year, it also acquired Belgian ITG Consulting Group and YoungWood IT Group. In addition, the company divested its Technical Automation and ApplicationNet units to focus on its core business of consulting, IT, and outsourcing.

September 10, 2008 - IT services vendor iGate plans to spin-off its Mastech IT staffing services and consulting services arm into an independent company. The said September 16 is the proposed date for the spin-off. After the spin-off Mastech will be a separate listed company with revenue of approximately $100m. All the shareholders of iGate will get Mastech shares by the end of September. The company has declared a dividend of one Mastech common stock for every 15 shares of iGate common stock. The company delisted its Indian subsidiary iGate Global Solutions last year. The company's staffing business is handled by Mastech and RPOworldwide.

September 9, 2008 - Indian IT Services firm Satyam is planning to make bigger acquisitions instead of smaller niche ones, according to a report in the Economic Times. The company has acquired six firms over the last three years, all in the sub-$50m price range, including the April 2005 purchase of US-based Citi Soft, a specialist consulting firm focusing on investment management for $38.7m, and its acquisition last year of UK-based consulting firm Nitor Global Solutions for $5.5m. Satyam CFO V Srinivas said the company is evaluating at least half a dozen acquisition targets at any point of time. "We are mainly looking companies in the US and Europe that are engaged in infrastructure managed services, engineering services, BPO, and consulting segments," he said. The slowdown in the US economy and low valuations of US-based firms could result in some targets becoming cheaper for acquisition by Indian companies. Satyam's cash reserves stood at INR 7,703 crores ($1.73bn) as of June 30, 2008.

September 1, 2008 - Indian IT services provider Tech Mahindra has acquired a 17.3% stake in systems integrator Servista as part of a strategic partnership to enable it to continue its European expansion.

August 29, 2008 - UK-based support services provider Serco Group has agreed to acquire US-based SI International, a provider of information services and network applications to the federal government. Serco will pay $423m and will assume debt of approximately $87.3m. SI International has 4,500 employees. Clients include the US Air Force, Army, Department of Defense, and 15 federal civilian agencies. The company said 99% of second-quarter revenue came from federal government contracts. It will be integrated with Serco's North American unit in Virginia. The combined entity will be headed by the unit's chairman and chief executive Ed Casey, and will have 11,500 employees and revenue of approximately $1.3bn. Serco said it expects the combined entity to provide annualized cost savings in excess of $10m from the end of the second full year of ownership. This acquisition is expected to be accretive to Serco's adjusted earnings in the first full year of ownership.

Ø August 20, 2008 - India-based IT services vendor ITC Infotech has expanded its footprint in the US with the acquisition of Pyxis Solutions through its US-based wholly owned unit ITC Infotech (USA). Financial terms of the deal were not disclosed but ITC Infotech said Pyxis will become a wholly owned unit of the company. Pyxis Solutions, which was founded in 2000, provides IT services for quality assurance, testing and automation focusing on STP/T+1, knowledge management, and outsourcing. Its customers include Merrill Lynch, Banker's Trust, Deutsche Bank, Citibank, Chase Manhattan Bank, AIG, Prudential Insurance, Double Click, and Sony.

August 7, 2008 - GFI Solutions, the Canadian subsidiary of French IT services vendor GFI Informatique, has acquired Bell Business Solutions, a subsidiary of Bell Canada. Bell Business Solutions provides business IT services for the municipal sector, and health, manufacturing, distribution, and printing industries across Canada. The company reported annual revenue of CAD 40m ($38m) and has 350 employees. After the acquisition is completed, it will operate under the name GFI Business Solutions. Bell Canada is selling off non-core businesses to streamline its operations to become a private company by the end of the year. Earlier this week it sold its defense, security, and aerospace unit to pilot trainer CAE for CAD 26m ($25m). Gilles Letourneau, president and chief executive at GFI Solutions, said: "In addition to consolidating our presence across Canada in the business solutions market, we anticipate significant potential for cross-selling our consulting services in the various target sectors."

August 6, 2008 - Aegis BPO, a part of Essar Group, has agreed to acquire Philippines-based back-office outsourcing provider PeopleSupport for $250m. PeopleSupport will be merged with Essar Services and will be renamed Aegis PeopleSupport. It will have an employee base of 29,000 across the Philippines, India, the US, and Costa Rica. PeopleSupport reported $150m revenue for the last financial year. It is the 11th acquisition by Aegis BPO in the last four years. It recently acquired the call center facility of AOL in Bangalore for $30m. The company has nine centers and generates 67% of its revenues from the US. The acquisition of PeopleSupport will add 15 new clients in the travel and transportation sector. Aparup Sengupta, chief executive and managing director at Aegis BPO, said: "The addition of PeopleSupport's high-performance operations in the Philippines and Costa Rica will enable Aegis BPO to become a leader."


July 29, 2008 - France-based IT services provider Capgemini has agreed to acquire the application services business of Getronics PinkRoccade, GPR, for 255m euros ($400.9m). GPR's Business Application Services BV division offers services including application development, maintenance, and management. It generates 40% of revenue from the Dutch public sector.

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Sources used in this blog publication include:

Generation Equity Advisors LLC Research
Factset Mergerstat
Thomson-Reuters
Datamonitor ComputerWire
DigitalMedia Wire
Capital IQ
Company Websites and Filings