Satyam acquires consulting co Citisoft for $39m

23rd April 2005: India's Satyam Computer Services is acquiring Citisoft, a London-based specialist investment management consulting firm, for a maximum consideration of around $39m. The deal consists of a guaranteed payment of $23.2m and an additional performance based payment of up to $15.5m over a three year period.

Established in 1986, Citisoft says it has a client base of more than 75% of the top 50 global asset managers. In addition to its London headquarters, Citisoft has offices in Boston and New York. Following the acquisition, Citisoft will become part of Satyam's financial services business unit.

Commenting on the deal, B Ramalinga Raju, founder and chairman, Satyam, says: "The acquisition is destined to enable Satyam to build a unique position and global footprint in the financial services sector and, we believe, the power of the brand, network and market experience will create precisely the mix we need."

Jonathan Clark, founder and executive director, Citisoft, adds: "We can now offer an unrivalled value proposition that covers everything from full-scale business transformation to back-office support at a great value."

Investors` body seeks listing norms change for M&As

23rd April 2005: The National Investors Foundation (NIF) has sought a change in the listing agreement of the Securities & Exchange Board of India (Sebi) so that it could offer a better deal to the shareholders of the merged company in case of merger and amalgamations (M&A). The NIF has pointed out that the shareholders of the merged outfit suffer due to delay in listing of the newly issued shares. The foundation has given a presentation to Prateep Kar, executive director (secondary markets) of the regulator, on April 21 in this regard.

The NIF has argued that generally the shareholders of transferor company receive shares of the transferee company and trading in the shares of transferor company stops. But generally there is a huge gap in the period that trading in the shares of the transferor company stops and the shares of the transferee company are allotted to the shareholders of the merged company. “The delay is anywhere between 4 to 10 weeks as evident in the case of the merger of Vardhaman Spinning and Mahavir Spinning, Burroughs Welcome and Glaxo, JVSL and Jindal Iron etc,” the presentation says.

The foundation has suggested that the Sebi should take appropriate steps to stop trading in the shares of both the companies in case of merger by changing the listing agreement. Apart from stopping the trading, it has given an alternative suggestion which allows trading even in the shares of the merged company during the interim period in a manner that reflects the swap ratio of the merger.

Wipro Spectramind to merge with Wipro Technologies, new co. to be called Wipro BPO

23rd April 2005: Wipro today said it would merge BPO subsidiary (Wipro Spectramind) with itself, while moving away to a high value transaction processing model from the existing call centre focused business due to high demand from its clients. "38% of our BPO business comes from our IT clients. They want to get a single invoice. A merger will help us focus on delivering technology services," Wipro BPO CEO Raman Roy told reporters here. The new entity, which will be a division of Wipro, will be called Wipro BPO. Wipro BPO employs over 15,673 people in its centers in Mumbai, Pune and Delhi among others.

Wipro BPO contributed 13% of Wipro's global IT services rpt global IT services revenues of Rs 1,640.9 crore in the fourth quarter ended March 2005. Wipro chairman Azim Premji said strategic transformation of the BPO business continued which apart from changing the revenue profile would see a tighter integration with its vertical businesses. "This will help us in not only building domain competency in our BPO business, but also ensures a far superior go to market approach," he said. Roy said the firm was eyeing the technology expertise within Wipro to tap the high value transaction processing model, while moving away from the call centre business. "Our clients want us to offer technology based fulfillment services," he said.