Deal Beat

Volume 11 - October 2005

Recent Acquisitions
Recent Business Deals

RECENT ACQUISITIONS

Oracle acquires Siebel

Software giant Oracle has acquired rival Siebel Systems, in a deal worth $5.8 billion. Oracle offered $10.66 for each share of Siebel stock, a nearly 17 percent premium over the company's $9.13 closing price.

The Siebel acquisition will add 4,000 customers and 3.4 million CRM users to Oracle. According to Oracle CEO Larry Ellison, the deal was in part fueled by requests from partners and customers, such as General Electric, who wanted to hold a single company accountable for their applications and also ease the integration process.

Oracle buys in a majority interest in I-flex

Oracle has acquired 41 percent stake in I-flex for around $593million. Apart from the stake it has bought over from Citibank, the company has earmarked another $316 million to purchase a 20 percent stake from other shareholders, as per Indian regulations. I-flex it is believed will continue to run as a separate company with its focus unchanged.

The deal combines Oracle's strength as a software vendor with a global footprint and significant onsite sales, account management and domain expertise, with I-flex's strong financial services domain and offshore experience.

Oracle buys Retek

Oracle has acquired Retek in a deal valued at around $650 million. The acquisition is believed to create a strategic fit for oracle as almost 80 percent of Retek’s customers run their Retek applications on the Oracle database. Retek has paid SAP a $25 million termination fee, because it walked away from its previous definitive merger agreement with the software giant.

According to Oracle officials the company intends to use the Retek acquisition to establish itself quickly in the retail applications business.

Oracle acquire ProfitLogic

Oracle’s focus on the retail space continued with the acquisition of ProfitLogic, a retail software vendor focused on merchandise optimization technology. Oracle believes that the ProfitLogic acquisition will bring to its fold a new set of industry and technical capabilities

It is believed that Oracle intends to integrate ProfitLogic's applications for pricing, assortment, and allocation with the Retek Merchandising System.

Oracle buys logistics software maker G-Log

Oracle has also acquired Global Logistics Technologies Inc, a privately held company with a staff of around 175 and a customer list that includes Du Pont, Halliburton Co. and Family Dollar Stores (G-Loc) for an undisclosed sum.

Oracle plans to use G-Log's GC3 software as the basis of a "logistics hub" in its upcoming Project Fusion applications suite. The company intends to integrate GC3 with its own E-Business Suite, but GC3 will have its own database and continue to interoperate with products from other software vendors.

SAP acquires Triversity

SAP has acquired retail e-business applications specialist Triversity for an unknown sum. Triversity's technology is expected to provide SAP with products that cover point of sale, retail supply chain and corporate back office. The acquisition is expected to be completed in October.

Triversity, a Canada based privately-held company, has over 250 clients and will bring to the SAP fold clients like the cosmetics maker Body Shop International Plc.

eBay acquires Shopping.com

eBay acquired Shopping.com in a $620 million cash transaction to in a bid to revive its growth. The acquisition will put eBay in close competition with the commercial engines of search giants Yahoo and Goggle. The deal also signals eBay's financial interest in the booming search-engine marketing business, which is estimated at over $5 billion annually.

Satyam Acquires Knowledge Dynamics

Satyam Computer Services has acquired Singapore-based Knowledge Dynamics., a high-end consulting solutions provider in Business Intelligence and data Warehousing. The acquisition is an all-cash deal involving a consideration of US$ 3.3mn of which Satyam will make an initial payment of US$ 1.8 Million and the balance spread over two years. Satyam will also pay an additional US$ 2.2mn as earn out payments subject to revenue and profitability targets over the next three years.

MindTree acquires Linc Software

MindTree Consulting, has acquired Bangalore-based Linc Software Services Private Limited to enhance its presence in the application development and maintenance domains for IBM mid-range Systems. Linc Software has over 220 employees and specializes in offering software services to manufacturing and, BFSI sectors. Linc Softqware clientele include Conagra Foods, Unilever, Atlas Copco, Emerson Group, Novartis and Viacom.

Scandent to merge BPO

The Scandent Group has decided to merge its BPO subsidiary Cambridge Services into its listed entity Scandent Solutions Corporation. The share swap ratio has been set at one share of Cambridge for 583 shares of Scandent Solutions.

Scandent Group had earlier carved out the insurance processing division of US Insurance major Aon last year and bought in a 75% stake. The total acquisition value was estimated at around $110m. Aon’s 25% stake in Cambridge Services will translate into a 16.2% equity stake in Scandent Solutions.

Office Tiger acquires Mortgage Ramp

Office Tiger, has acquired Atlanta-based real estate and finance outsourcer MortgageRamp from GMAC. The acquisition value has not been disclosed. MortgageRamp is General Motors Acceptance Corporation Financial Services’ (GMAC-FS) real estate mortgage finance back-office company. The company performs processing for commercial residential loans and has over 150 clients.

Lionbridge completes acquisition of BGS

Lionbridge Technologies, has acquired Bowne Global Solutions, a division of Bowne & Co., Inc.

Both Lionbridge and Bowne Global Solutions (BGS) provide globalization services that enable organizations to release products and content that meets the linguistic, technical and cultural requirements of customers, partners and employees worldwide. The total acquisition value is around 193 million wherein Bowne & Co, the erstwhile parent will receive $130 million in cash, and 9.4 million shares of Lionbridge common stock

Hinduja TMT acquires Immaculate Interactions.

Hinduja TMT (HTMT) acquired Immaculate Interactions, a Bangalore based call centre. Terms of the deal are not disclosed. Immaculate has around 200 live seats at its 55,000 sqft facility and is capable of seating 600 agents (300 agents across two shifts). The company specializes in the outbound telemarketing space

SSA acquires Epiphany for $329 Million

SSA Global Technologies has acquired CRM developer Epiphany for US$329 million in cash.The transaction provides SSA with access to Epiphany's CRM suite.

Both companies use similar architectures that revolve around Service Oriented Architecture (SOA) and J2EE technology. It is believed that Epiphany CRM will strengthen SSA Global’s leadership position as a provider of extended enterprise solutions.

TCS in BPO venture with Microsoft, Chinese Companies

TATA Consultancy Services (TCS) and Microsoft have been selected as strategic partners by the Sino-India Cooperative Office (SICO) of China to form a joint-venture company for IT outsourcing services for the global and the Chinese markets. TCS will be the majority shareholder, while Chinese firms and Microsoft will act as strategic investors holding minority shares. The joint venture to be located in Beijing's Zhongguancun Software Park, will start operations in early 2006.

CCIL acquires 15% stake in SAP Infotech

Chartered Capital and Investment Limited (CCIL), has acquired 15 per cent stake as strategic investors in SAP Infotech Private Limited. SAP Infotech will be investing Rs 100 million in setting up a 350 seater accounting financial BPO unit at GNFC Tower at Ahmedabad. CCIL already has a presence in the accounting and financial BPO space with its company Munimjee. The UK based Eura Audit International has a 40 per cent stake in the company while the remaining is with four Indian partners.

RECENT BUSINESS DEALS

TCS, Infosys bag 1.8 billion Euro ABN Amro outsourcing deal

ABN Amro bank has signed a 1.8 billion Euro contract with five IT-vendors including Tata Consultancy Services, Infosys and IBM. Under the deal TCS and Infosys will provide application support and enhancement to ABN Amro bank for its worldwide operations, while IBM will provide IT infrastructure support. Global IT giants Accenture Ltd and IBM were among the front-runners as primary vendors for the infrastructure part of the contract. The deal is said to be one of the largest from a European bank in recent years. ABN Amro had signed up EDS for a $1.3-billion outsourcing deal in 2002.

Spanco secures Rs 5 crore outsourcing contract from Air India

Sparsh’ the domestic call center operations of Spanco Telesystems and Solutions Ltd has received an outsourcing contract worth Rs. 5 Crore from Air India. The company will provide customer support services for Air India from its facilities in Mumbai and Gurgaon.

Bharti to outsource call-centres business worth Rs 1,100 crore

The Bharti group has signed a contract ranging from Rs 900 crore to Rs 1,100 crore with four business process outsourcing (BPO) companies, Mphasis BPO, HTMT Teletech and IBM Daksh. The company had earlier outsourced network management to Ericsson for in two different deals worth $400 million and $250 million respectively

Mphasis BPO bags multi-year SBI order

Mphasis BPO, has bagged a major multi-crore, multi-year order from State Bank of India valued at approximately Rs. 250 Crore. Under the deal Mphasis will provide predominantly voice-based inbound services for the bank.

British Midland outsources to India

British Midland has decided to outsource its customer service operations to India under a five-year outsourcing agreement with the United Kingdom's contact centre management company Ventura. Under the agreement Ventura will provide a dedicated workforce of 250 agents to serve over 200,000 customer enquiries per month for British Midland. Ventura has a workforce of more than 7,500 in the UK and India and provides on and offshore service.

Disney outsources tech for $1.3bn

Walt Disney has outsourced a range of its technical operations to IBM and Affiliated Computer Services (ACS). The deals are worth a total of $1.3bn over seven years. Under the terms of the contract IBM will receive roughly $730m over seven years while ACS’s seven-year contract with Disney is worth $610m.