Making Acquisitions Work Sanjay Dhawan, President NASSCOM 2008: India Leadership Forum

Aricent We understand the dynamics of buying and selling. We understand how to integrate acquisitions. We understand the dynamics of being bought and sold.

We understand the dynamics of buying and selling.

We understand how to integrate acquisitions.

We understand the dynamics of being bought and sold.

Aricent M&A history: 2004-2007 2004 2005 2006 FutureSoft Flextronics Software Systems (FSS) Emuzed Brain Blue FSS Azisa (South Africa) Azisa frog design frog design Aricent 2007 Flextronics International ownership KKR & Sequoia ownership Hughes Deccanet Avnisoft

Aricent Recent M&A Activity In late 2007 early 2008, Aricent acquired a Nokia Siemens Networks team 2G, 2.5G, 3G wireless 100+ engineers Southwood, UK DataLinx Communications service provider solutions 400+ consultants, developers and engineers Tarrytown, New York, USA

In late 2007 early 2008, Aricent acquired

a Nokia Siemens Networks team

2G, 2.5G, 3G wireless

100+ engineers

Southwood, UK

DataLinx

Communications service provider solutions

400+ consultants, developers and engineers

Tarrytown, New York, USA

Why? It was driven by industry changes & customer demand.

Why?

It was driven by

industry changes &

customer demand.

The communications industry has evolved Industry demanded a pure-play communications software company with superior skills, speed and scale. So we built Aricent. Yesterday: simplicity. dial. ring. talk. Today: complexity. dial.click.channel  . connect.download.record. talk.send.view.broadcast.

Why acquire? Acquiring companies allowed us to enhance our portfolio rapidly and comprehensively. Goal 1: offer a complete spectrum of communications software services and products. Goal 2: accelerate revenue growth inorganically in nascent sectors. Goal 3: give clients (equipment OEMs, device OEMs, and service providers) a one-stop-shop for increasingly complex, interconnected solutions.

Acquiring companies allowed us to enhance our portfolio rapidly and comprehensively.

Goal 1: offer a complete spectrum of communications software services and products.

Goal 2: accelerate revenue growth inorganically in nascent sectors.

Goal 3: give clients (equipment OEMs, device OEMs, and service providers) a one-stop-shop for increasingly complex, interconnected solutions.

Why be sold? Becoming independent under the majority ownership of Kohlberg Kravis & Roberts Co. (KKR) & Sequoia Capital gave us the complete independence to work with all equipment OEMs, device OEMs and service providers & gave us the time and flexibility to fully integrate all the software companies into a single entity, in preparation for Aricent’s next stages of growth

Becoming independent under the majority ownership of Kohlberg Kravis & Roberts Co. (KKR) & Sequoia Capital

gave us the complete independence to work with all equipment OEMs, device OEMs and service providers &

gave us the time and flexibility to fully integrate all the software companies into a single entity, in preparation for Aricent’s next stages of growth

The Three P’s Aricent’s “Three P’s” of successful M&A: Planning People Processes

Aricent’s “Three P’s”

of successful M&A:

Planning

People

Processes

1. Planning Create, empower and unleash a clearly defined transition team (from both sides of the transaction) ASAP! The team will accelerate the integration process. The team will highlights portfolio, cultural, and organizational focus areas early. Have one or two (but no more) executives who are responsible to senior management for all planning and execution. Initiate these teams as soon as the contractual process allows.

Create, empower and unleash a clearly defined transition team (from both sides of the transaction) ASAP!

The team will accelerate the integration process.

The team will highlights portfolio, cultural, and organizational focus areas early.

Have one or two (but no more) executives who are responsible to senior management for all planning and execution.

Initiate these teams as soon as the contractual process allows.

2. People From the buyer’s side, you must immediately seek out both the formal and informal leaders within the acquired company and spend significant time with them before and after the transaction closes. These people are critical to the long-term success of the integration The informal leaders can be excellent sources of the acquired company’s general opinions AND be a conduit for informal communications to teams at the purchased company. Discussions with formal and informal leaders should be frequent and open: build trust.

From the buyer’s side, you must immediately seek out both the formal and informal leaders within the acquired company and spend significant time with them before and after the transaction closes.

These people are critical to the long-term success of the integration

The informal leaders can be excellent sources of the acquired company’s general opinions AND be a conduit for informal communications to teams at the purchased company.

Discussions with formal and informal leaders should be frequent and open: build trust.

3. Processes The acquirer must be open-minded and prepared to evolve its processes with each new acquisition. Sometimes the buying company has better processes. Sometimes the purchased company has better processes. Sometimes a combination of processes works best. Never assume that the bigger company’s approach is automatically better.

The acquirer must be open-minded and prepared to evolve its processes with each new acquisition.

Sometimes the buying company has better processes.

Sometimes the purchased company has better processes.

Sometimes a combination of processes works best.

Never assume that the bigger company’s approach is automatically better.

Aricent: The Art of M&A Before, during and after a transaction: there’s no such thing as too much planning. Successful integration after M&A requires “over communication” with teams. Bigger is not necessarily better: process change applies to the buyer, too.

Before, during and after a transaction: there’s no such thing as too much planning.

Successful integration after M&A requires “over communication” with teams.

Bigger is not necessarily better: process change applies to the buyer, too.

Thank you.