Big M&As In Indian IT Sector Often Don't Deliver: JP Morgan

31
cmt right
44
Comment Right
57
cmt right
13
cmt right
Printer Print Email Email


New Delhi: Big-ticket acquisitions in the Indian IT sector do not live up to the expectations in most cases due to factors like management team exit of target companies and a hurried integration process, says a report.



As per a study by investment banking major JP Morgan of all M&A deals valued at $500 million or above, the "feel- good factor" that the prospect of a large acquisition sometimes induces may be "more psychological" and may not square with the subsequent track record.



"Large mergers/acquisitions in this sector, much more often than not, don't live up to the expectations of the acquirer. Damned if you do, damned if you don't - this phrase seems to epitomize the large-scale M&A action in the Indian IT/BPO outsourcing space," JP Morgan said in its report.



Big-ticket M&As in Indian IT ordinarily have several objectives like introducing or raising growth profile in a distinct new function, selling the acquired capability into the broader base of the acquirer's existing clients and achieving sufficient scalable offshore flow-through over time to scale and break even on margins.



Also Read: Top 10 Antivirus Software of 2013



Also Read: Meet Apple's 9 Eminent Security Rock Stars


Source: PTI
next new
SPOTLIGHT
ATEN India Showcases its World
ATEN India, the Liaison Office of ATEN International, exhibited it's most promising data center in..
Robyn Denholm is new Tesla
Electric car company Tesla on Thursday announced the appointment of Robyn Denholm, an executive at..
Apple top-selling phone brand in
Moving ahead of its Chinese rivals, Apple became the top-selling phone brand during Chinese e-comm..
Gartner cites Newgen Software as
Newgen Software, a provider of Business Process Management (BPM), Enterprise Content Management (E..