The Satyam Computer Services has identified about four potential targets for takeover. All four acquisitions that the company is chasing are in the over $50 million range. The company began negotiating to these companies around two months ago. In these kinds of opportunities, it takes about 6-9 months to close the overall transaction. The company is currently talking to both IT as well as BPO companies. Satyam will want beef up its tentacles in the engineering services outsourcing and the remote infrastructure management space through acquisitions. Satyam is currently sitting on cash reserves of more than Rs 6,400 crore, which could be effectively positioned for future inorganic growth play, which has been an integral part of the growth strategy of Indian IT companies.
Moreover, valuations in the IT sector have headed southwards due to the recessionary trends across the globe; this has made acquisitions much more cheaper compared to 2006. However, this slowdown has resulted in some sections of the market doubting the ability of IT companies to live up to their promises of headcount addition, at least for this fiscal.
Moreover, valuations in the IT sector have headed southwards due to the recessionary trends across the globe; this has made acquisitions much more cheaper compared to 2006. However, this slowdown has resulted in some sections of the market doubting the ability of IT companies to live up to their promises of headcount addition, at least for this fiscal.
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