Basman | Explore: IT Outsourcing

United Internet AG, Montabaur, today reached a general agreement with Teleperformance SA, Paris, with regard to the sale of the United Internet Group subsidiary twenty4help AG, Montabaur, to Teleperformance.

twenty4help is the current European leading company in technical support & help desk with a consolidated turnover of more than 100 Millions €. The company operates in many European countries, such as Germany, the Netherlands, UK, Sweden, Spain, Poland and Czech Republic and offers technical support in 22 languages.

With the sale of the company, which no longer belonged to the Group’s core business, United Internet has completed the final step toward becoming a pure Internet Service Provider (ISP). The Group’s Outsourcing segment, of which twenty4help accounted for around 90%, will no longer be separately disclosed in future. The remaining Outsourcing brand InterNetX will be integrated into the Product segment. In future, therefore, United Internet will focus entirely on its Product segment (with the brands GMX, WEB.DE, 1&1, Fasthosts and InterNetX) and Online Marketing segment (with AdLINK, affilinet and Sedo).

In the course of the transaction, the value of twenty4help AG was determined to be around EUR 85 million. The final purchase price is based on the audited and certified consolidated financial statements of twenty4help AG for the fiscal year 2006. Teleperformance will pay the full purchase price in cash.

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Satyam: Deal or no deal? Still a lot of questions …

• IBM eyes stake in India’s Satyam (FT.com)  An executive close to the Hyderabad-based IT company confirmed that discussions had been held with Ramalinga Raju, the chairman and founder, who directly or through associates controls about 14 per cent of Satyam.  (tags: India Aquisitions)

• Outsourcer Satyam Posts Strong Third Quarter, Denies Takeover Talks - News by InformationWeek  Satyam also said Friday that it is not entertaining any takeover offers. “We firmly believe that enhancement in shareholder value is best when we continue to pursue the already successful global delivery model we specialize in. Satyam, therefore, shall not indulge in any such pursuits of being acquired,” said Satyam founder and chairman B. Ramalinga Raju, in a statement.  (tags: India Aquisitions)

… and the rumors still persist.

Biggest Acquisition in the Company’s History

Subject to the approval of the anti-trust authorities, S&T AG, the leading provider of IT services in Central and Eastern Europe, will purchase all shares in IMG Holding - The Information Management Group. The largest acquisition in the company’s history will enable S&T to strengthen and expand its core business area Business Solutions, enhance its portfolio of services and extend its geographic presence.

IMG “The Information Management Group” is an international consulting company headquartered in St. Gallen (Switzerland), which specialises in the implementation of innovative business models in processes and systems. At present the company has 653 employees at 27 subsidiaries in Central and Eastern Europe, Asia and the United States. In the financial year 2006* it generated revenues totalling CHF 130 million (EUR 81.6 million).

IMG was founded in 1989 as a St. Gallen University spin-off by professors Hubert Österle and Thomas Gutzwiller, and Tillmann Hüttenhain and is owned by its founders and employees. The Goldman Sachs Group and M2 Capital Management AG also hold significant interests in the company. According to Prof. Thomas A. Gutzwiller, Chairman of the Board of Directors The Information Management Group, “speed is an extremely crucial factor on our market. We were no longer able to optimally exploit the potential of the dynamic consultancy market with purely organic resources. The Management Board therefore systematically scanned the market for potential partners. After a careful evaluation process, S&T emerged as the ideal partner. “

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S&T AG, the Vienna based IT service provider specialized in the emerging East European markets, will acquire IMG The Information Management Group AG, the biggest and most important acquisition in the company’s history. S&T informs of the strategic background and therefore make a press conference on Thursday in Vienna. The company will grown from now 2,350 employees worlwide to almost 4,000. The revenues of the new group will raise to more than 450 million Euros.

The Information Management Group (IMG) with its headquarters in St. Gallen, Switzerland was founded in 1989 from the environment of the University of St. Gallen by Professors Thomas Gutzwiller, Hubert Österle and Tillmann Hüttenhain even today maintains a close relationship with the renowned Swiss university. The consulting firm is owned by the IMG founders and its employees. Moreover, other business interests are held by the Goldman Sachs Group and M2 Capital Management AG.

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Perot Systems Corporation announced that it has signed a definitive agreement to acquire QSS Group, Inc., a U.S. federal government information technology services company based in Lanham, MD.

Through this acquisition, Perot Systems strengthens its platform for growth within the federal government services sector, gains several significant government-wide acquisition contracts (GWAC’s) and further strengthens its IT capabilities, including information assurance and applications development and management. It also expands both the scope of services and the areas Perot Systems serves within the Department of Homeland Security and the Department of Defense.

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HP announced that it has signed a definitive agreement to purchase Bitfone Corp., a privately held global software and services company that develops software solutions for mobile device management for the wireless industry.

The acquisition is part of HP’s strategy to grow its mobile enterprise business. Acquiring Bitfone will strengthen HP’s ability to provide customers with a flexible, modular approach to building a mobile infrastructure by allowing them to choose what they need to meet their business needs.

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A former Gartner and PwC (now IBM) analyst and outsourcing exec, Vinnie Mirchandani, lets some speculations live up again:

The rumors have been floating for a few weeks now. IBM plans to acquire Satyam (or at least a major stake in), the 4th largest Indian offshore player.

Satyam is strong in several manufacturing markets and has one of the better packaged application practices of the Indian firms. It has also done a poor job marketing itself compared to the other Indian firms and IBM would clearly turn that around. But IBM inconsistently positions its own growing India operations, so I suspect integration will be a challenge.  And IBM will have to quit the double speak to customers about not being in India for lowered costs and reluctantly passing those along. It will also pressure Indian firms to step up their own western acquisitions to accelerate market share growth.

In January 2006 NetworkWorld summed it up:

Indian software services and business process outsourcing companies have been acquisition targets for the last couple of years, as multinational technology companies, particularly services companies, try to build low-cost services capability in India.

In 2004, IBM acquired Daksh eServices, a business process outsourcing (BPO) company in Gurgaon near Delhi. Last year, IBM acquired Network Solutions, an infrastructure services company in Bangalore, India, but the acquisition was focused on strengthening IBM’s networking and managed services for the Indian market.

In 2003, Perot Systems bought out its Indian partner, HCL Technologies, in their joint venture HCL Perot Systems in Noida near Delhi. In the same year, it also acquired Vision Healthsource India, a Chennai-based provider of billing and claims solutions for healthcare service providers in the U.S.

Oracle also last year acquired a 41% stake in i-flex solutions, a publicly held banking software company.

There had been a lot of speculations about this since the beginning of 2006. But what indicates now in December that this could be still a deal? Or it is just hot air again … We’ll watch the stocks and crosscheck these rumors again and again.

Fujitsu Services, the European IT services arm of the Fujitsu Group, today signed a contract to acquire investor General Atlantic’s stake in TDS AG for a purchase price of € 2.80 per share. The contract will become effective after antitrust clearance.

Further shareholders have offered to sell their shares to Fujitsu alongside General Atlantic. This will take Fujitsu’s shareholding to 79.1 percent, making it the majority shareholder in TDS AG.

The deal is a significant landmark in Fujitsu’s 40 year history in the region and further strengthens the company’s position in the market as well as demonstrates its ongoing European growth ambitions. The operations of Fujitsu and TDS will be a significant force in the German market focusing on an integrated and already complementary portfolio which includes: IT outsourcing; HR services and solutions; desktop managed services; IT infrastructure and IT consulting.

Andrew MacNaughton, managing director continental Europe, Fujitsu Services, commented: “This is a key milestone in our growth strategy for Europe. Our stake in TDS AG will enable us to harness our collective strengths and help us to become one of the top IT services players in Germany.”

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CSC announced that it has agreed to acquire Datatrac Information Services, Inc., a privately held U.S. government services and solutions provider headquartered in Richardson, Texas. CSC expects the transaction to be accretive to earnings in the first year. Terms of the acquisition were not disclosed.

Datatrac employs more than 1,800 professionals in Richardson and Fort Worth, Texas; Wheeling, W.Va.; Chantilly, Va.; Laguna Nigel, Calif.; Lincoln, Neb.; St. Albans, Vt.; and Barbourville, Corbin and Williamsburg, Ky.

The acquisition extends CSC’s ability to offer comprehensive solutions in identity management and credentialing, a market segment of strategic importance to CSC’s Federal Sector operation. It also expands the company’s capabilities in offering customer contact solutions to clients across the broad U.S. federal market.

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Atos Origin announced that it has completed the acquisition of Banksys and Bank Card Company (BCC) from Fortis, Dexia, KBC, ING and other Belgian banks, following European Competition Authorities’s approval of the deal on September 29th 2006. The acquisition will create a European Leader in Payment Services, with combined pro forma 2006 revenues of EUR 630 million.

Within the context of SEPA, the process of European standardisation in payment systems, the acquisition of Banksys and BCC by Atos Origin, through its subsidiary Atos Worldline, creates an entity with a strong expertise in the European payment market and represents a critical milestone in the accelerating consolidation of the European landscape in payment services.

Highlights of the deal:

• Creating a European leader in payment services with combined pro forma 2006 revenues of EUR 630 million.
• A combined workforce of 4,200 staff with extensive experience in payment operations in Germany, France and Belgium, and a presence in United Kingdom, Spain and Italy.
• Multi-year contracts guaranteeing revenue with the major banks in Belgium.
• Consolidation of volumes to better absorb SEPA investments.

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Tata Consultancy Services and its Chinese partners, supported by the National Development and Reforms Commission (NDRC) announced that Microsoft Corporation had signed a tripartite investment agreement to be a strategic investor in TCS China, with the TCS and the and Chinese Parties, which are national software export bases located in Beijing and Tianjin and nominees of the NDRC. Microsoft will hold a minority stake in TCS China.

The agreement was signed at an Indo-Chinese business forum which had been addressed by President Hu Jintao earlier.The entry of Microsoft follows the granting of the business operating license to TCS China. It also signals the culmination of the process to get the joint venture operational after an MoU was signed between the three parties (TCS, Chinese parties and Microsoft) in June 2005.

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(Disclaimer: Through my association to exempTec and the a&o group I was informed of the developments of this deal from the very first beginning)

a&o is becoming the European market leader in technology services

With the acquisition of the field services unit of EDS (Electronic Data Systems) with effect from 15th November 2006, a&o group continues its international growth, which started with the group’s purchase of AgfaPhoto’s service organisation. In future, “With the acquisition of the EDS’ GFS (Global Field Services) that implies a strong commitment to a long term partnership we have managed to accomplish a masterpiece for our clients,“ said the a&o group’ s managing director Michael Müller after the signing the takeover agreements. “In the past, a&o has already proven that as a medium-sized business, it is able to integrate new employees in the existing company structure. Therefore, we are confident that the acquisition of almost 3,000 new employees will not be a problem for a&o, which up to now has had 1,300 employees.“

With the purchase and successful reorganization of the Siemens subsidiary SINITEC, a&o has managed to become a first-class company for After Sales services. After that, the group laid the foundations for a dynamic and successful internationalization of the business through the takeover of parts of the traditional company AgfaPhoto, says Müller. Müller, who is involved as an economic adviser in the Association of German Entrepreneurs (Bundesverband mittelständische Wirtschaft BVMW), stressed that both the EDS management and the a&o management had acted responsibly towards the employees and would continue to do so in the future: “The current situation is different than in the case of the SINITEC companies takeover when some reorganizational measures were unavoidable”.

The a&o managing director pointed out that his company was entering into a long-term business relationship with EDS. This partnership would ensure continuity towards customers, partners and employees of all companies involved. “With this entirely positive business transaction, a&o, which came on the market as a provider for after sales services three years ago, will become the market leader for technical services in Europe,“ Müller explained.

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• Acquisition to support EDS’ offerings to SAP enterprise management and CRM clients
• GEMS to strengthen EDS’ Application Services portfolio and speed time to market for SAP solutions
• Acquisition to build on EDS’ NetWeaver capabilities/competencies

EDS today announced it has reached an agreement to acquire Global Enterprise Management Solutions. Based in Irving, Texas, GEMS is a provider of SAP enterprise management and customer relationship management solutions. Financial terms of the transaction were not disclosed. The transaction is expected to close by year-end.

GEMS is a certified SAP value-added partner serving clients primarily in the IT services, assembly/manufacturing, logistics and transportation industries. GEMS offers IT solution development, implementation consulting and solution reselling services for clients looking to deploy SAP.

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Servo has been acquired by IT support services provider Phoenix IT Group plc for a total consideration of £30.25 million1.  The acquisition will enable Servo to deliver enhanced business continuity and disaster recovery services to SME customers, by partnering with Phoenix’s NDR business unit.

Servo will continue to operate as a stand-alone business under the leadership of existing Managing Director, David Jones, while benefiting from the added financial stability and strong organisational backing of Phoenix IT Group.

As well as working closely with NDR, Servo will be able to draw on Phoenix IT’s cross-platform UNIX support skills and its Cisco Gold Partner status.

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Tata Consultancy Services announced that it had acquired TCS Management (formerly called Total Communication Solutions), a privately-owned consulting company in Australia for an up-front cash payment of A$ 1.7 million, plus performance payments for a total consideration of A$ 15 million over 5 years.

TCSM is privately owned and has over 35 senior consultants with a total turnover of AUD $5.5M for the financial year ended June 30, 2006.

Neville Roach, the chairman of TCS-owned FNS, will be the chairman of TCSM. Key personnel, most of whom have over 15 years of industry experience, including the current management team will remain with the company.

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