Nasscom M&A

What's the Payoff? What was the risk appetite, and what did the risk-reward payoff look like in 2008? Optimism in H1 even in a tightening market, moved toward stagnation in Q3 and Q4 as the full extent of credit crisis became apparent. What will be the industry’s risk appetite in 2009? Appetite for risk remains extremely low, with limited transaction volumes occurring, opportunities will primarily be related to consolidation and distress circumstances. Captive divestitures as one form of M&A may buck the trend as the service provider community looks to establish solid foundations for growth during the recession.

What was the risk appetite, and what did the risk-reward payoff look like in 2008?

Optimism in H1 even in a tightening market, moved toward stagnation in Q3 and Q4 as the full extent of credit crisis became apparent.

What will be the industry’s risk appetite in 2009?

Appetite for risk remains extremely low, with limited transaction volumes occurring, opportunities will primarily be related to consolidation and distress circumstances.

Captive divestitures as one form of M&A may buck the trend as the service provider community looks to establish solid foundations for growth during the recession.

What's the Payoff? What will be the top risks (and associated rewards) in M&A in 2009? Long drawn out transactions impacted by indecision Inability to value companies appropriately and a lack of available financing options Purchasing of elite teams to gain capability rather than companies Opportunistic buys at very reasonable reduced values What are the implications for Buyers, Sellers, Investors Generally held view is that 2nd quarter 2010 will see an upward change in M&A activity. The outsourcing sector is likely to be one of the first sectors to pick up again by virtue of it’s long-term recurring cash-flows. Buyers – Looking either long term or at distress opportunities Sellers – Looking at low valuations until normality returns Investors – Increasingly risk averse with lowered return expectations

What will be the top risks (and associated rewards) in M&A in 2009?

Long drawn out transactions impacted by indecision

Inability to value companies appropriately and a lack of available financing options

Purchasing of elite teams to gain capability rather than companies

Opportunistic buys at very reasonable reduced values

What are the implications for Buyers, Sellers, Investors

Generally held view is that 2nd quarter 2010 will see an upward change in M&A activity.

The outsourcing sector is likely to be one of the first sectors to pick up again by virtue of it’s long-term recurring cash-flows.

Buyers – Looking either long term or at distress opportunities

Sellers – Looking at low valuations until normality returns

Investors – Increasingly risk averse with lowered return expectations