TCS to buy Citigroup Global Services for $505mn

Tata Consultancy Services (TCS) signed an agreement with Citigroup Inc to acquire its captive BPO-Citigroup Global Services (CGSL) for $505 million (around Rs 2,424 crore) in an all-cash transaction. In addition to the sale, Citi has signed an agreement with TCS to provide, through CGSL, process outsourcing services to Citi and its affiliates in an aggregate amount of $2.5 billion over a period of 9.5 years.

The acquisition broadens TCS’s portfolio of end-to-end IT and BPO services in the global Banking and Financial Services (BFS) sector.TCS has provided IT services to Citi since 1992 and is currently one of the largest IT services partners for Citi, delivering IT and business processing outsourcing services to Citi across its operations in North America, Europe, India, Japan, Singapore and the rest of Asia Pacific.The parties expect to close the transaction in the fourth quarter of 2008. Merrill Lynch acted as advisors to TCS in this transaction.

Infosys eyes Europe, Japan for acquisitions

Infosys Technologies is scanning the markets of Europe and Japan for acquisitions in the price band of $200-$300 million to energise its non-linear business strategy as well as to expand its geographic reach.

“We are looking at acquiring companies in Germany, France and Japan. These markets have started opening up and we are targeting companies engaged in consulting, BPO, packaged implementation services or IP-based firms as it will help us move up the value-chain considerably,” said Infosys CFO V Balakrishnan.

Unlike the traditional linear business model, where the revenue is effort-based (more the number of people working, more the revenue), the non-linear business model is based on outcome.So, with high-value services, the companies can demand a premium from its clients.

Last year, Infosys had taken over Philips’ finance and administration business process outsourcing (BPO) centres spread across India, Poland and Thailand for $28 million.In 2003, it had acquired Expert Information Services in Australia for $22.9 million.

Read more in The Economic Times article.

NIIT signs deal to buy 48% stake in Evolv

NIIT has signed a share purchase agreement to acquire 47.87% stake in Noida-based Evolv Management Services (Evolv) - a provider of English language and communication training - with 100 employees and pan-India presence and delivery capability.Evolv provides training services to clients across IT and ITeS, banking, insurance and telecom.

Evolv has developed over 50 specialised courses, and a library of modules for providing training in English and communication. The courses include accent neutralisation, fluency and expression, cross-cultural communication, presentation skills, business writing, assertive communication and conversational skills. The courses can be customised to be delivered to working professionals from different industries, functions and levels.

Nasscom Plans $25 Million Angel Fund

The trade body for Indian IT software and services industry, Nasscom, plans an India Innovation Fund which will provide angel funding to technology start-ups, says a report. The fund will have an initial corpus of Rs 100 crore ($25 million), which could be increased to Rs 150-200 crore ($37.5-50 million) in the next two years.
Nasscom plans to set up the fund through a public-private partnership. It will be managed by professional fund managers, while the government's role will be limited (why government at all when Nasscom can do it alone?). Apparently the fund will allow private investors to acquire stakes in the professionally-managed PPP fund.

Kiran Karnik, president, Nasscom, has been quoted as saying: "We want this fund to concentrate on start-up firms focusing on innovating technologies. We are not looking at stage-B funding for somebody who is already established and looking at further growth."The fund will be raised from contributions from across the industry, financial institutions and companies. Karnik said Nasscom is talking to institutions like ICICI too.

A Boston Consulting Group-Nasscom report on innovation - Indian Innovation Report 2007 - said by focusing on innovations, Indian IT/ITeS firms could target a potential revenue of $175 billion by 2012 against the projected revenue of $124 billion. The industry had registered revenues of $39.6 billion last year.

Read more in The Business Standard article.

HCL Technologies may bid for Cambridge Solutions

One of India’s premier IT companies, the $1.1 bn-HCL Technologies may bid for Cambridge Solutions, one of the top BPO outfits of the country, valued at around $350 mn. If the deal sails through, it may be the biggest M&A ever in the Indian IT space.

HCL has signaled early interest to acquire around 42% promoter holding put up for sale. The promoters of Cambridge have mandated Lehman Brothers to scout for potential suitors. The promoters of Cambridge, which includes names like ex-McKinsey chief Rajat Gupta, the US-Canadian Bronfman family of Seagram fame, serial investor Ramesh Vangal and former PepsiCo chairman Chris Sinclair, together hold 59.15% stake. It is learnt that Mr. Vangal, who is the single largest individual investor with around 18% stake, is unlikely to offer his shares.

Almost two-thirds of Cambridge’s revenues comes from high-end BPO operations spread across the US, India and Europe. It has a strong presence in the lucrative insurance processing domain, with around 2000 of its total 4500 employees located in the US. HCL has BPO operations at nine centres in India, two in the UK and one in Malaysia, which provide both voice and non-voice services. The BPO operations constitute around 17% of revenues and employ around 10,000 people.

Read the article in The Economic Times article

Indian IT major Cognizant rings NASDAQ bell

Indian IT major Cognizant Technology Solutions Corporation rang the NASDAQ opening bell at 9.30 a.m. (8 p.m. IST) Monday simultaneously in Chennai and New York, commemorating "India's emergence as a global leader in the IT and BPO services".

As the Cognizant CEO Francisco D'Souza pressed a button at its techno-complex in Chennai, India, the bell rang at NASDAQ's MarketSite at Times Square in New York City.

The Opening and Closing Bell events are symbolic ceremonies that represent the open and/or close of the NASDAQ trading day, which brings together investors and market participants from around the world to trade electronically.