Indian IT companies explore overseas acquisitions

By agencies   |   Thursday, 10 August 2006, 19:30 IST
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NEW DELHI: Indian Information Technology (IT) and business process outsourcing (BPO) companies have been indulging in an overseas shopping binge that is expected to assume huge proportions. As the initial move, Indian dealers have chosen about a dozen companies spending over $500million. Barring few instances, the buys have been small- in the range of $40-60 million but the situation is expected to change. Experts say that the valuations for companies abroad are attractive –averaging less than 1.5 times the revenue multiples. Also, the acquisition help acquire clients and more importantly domain expertise in niche areas. Wipro Technologies has brought about four companies this year and is evaluating over a dozen. Bangalore-based Subex Systems made the biggest acquisition, acquiring UK based Azure Solutions for $140 million. It may be recalled that NIIT had recently bought out the U.S-based $80 million company, Element K, for $40million and Sasken Technologies bought Finland based Botnia Hightech for $45 million. Genpact had acquired U.S based Money Line. Similarly, Transworks procured Minacs, a Canada based company.