Usage of Merger & Acquisition at Mphasis

1. By:
Pranab Karmakar (55)
Prantik Maity (56)
Pratip Ghosh (57)
Pritam Moitra (58)

2. Jeroen Tas
Co-Founder
Mphasis Corporation
Jerry Rao
Co-Founder
Mphasis Corporation
Let’s start some India
based ops
OK…Let’s kickoff by
buying BFL SW
2000
• I n c o r p o r a t e d i n 1 9 9 2
• 3 0 S e r v i c e D e l i v e r y C e n t r e s
i n 1 9 c o u n t r i e s
• C E O : N i t i n R a k e s h
• C o r e O p e r a t i o n s :
• B P S
• I T / I Te S
• C l o u d
• C o g n i t i v e C o m p u t i n g
• G o v e r n a n c e , R i s k &
C o m p l i a n c e
• I n f r a s t r u c t u r e S e r v i c e s
• P r o d u c t E n g i n e e r i n g
• R e ve n u e : $ 9 5 0 m i l ( ₹ 6 3 7 7 c r )
• N e t I n c o m e : $ 1 2 0 m i l ( ₹
8 3 7 c r )
• P a r e n t : T h e B l a c k S t o n e
G r o u p
• H Q : B a g m a n e Te c h P a r k ,
B e n g a l u r u

3. • Proven Technology
• Domain Expertise
• Process Expertise
• Thought Leadership
• Innovative solutions
• Global Presence
• Flexible
• Customer Focussed
• Performance Driven
• High-end technology
solutions
• Leading enterprise
architecture
initiatives
Architect
Community
Engagement
Models
Integrated
Offerings
Positioning

4. Bargaining Power of Consumers
1. High Bargaining power of consumers
2. Similar services offered by
competitors
Threat of New Entrants
1. Potential entry of new competitor is
high.
2. Easy to gain access to tech & capital
requirement.
Bargaining Power of Suppliers
1. Mainly Manpower, therefore salary &
perks
2. Least affect
Threat of Substitute Products
1. Products and services -mainly
customized.
2. Some regular product enhancement,
but can’t be proper Substitute.
Rivalry within Industry
1. Existence of many players
2. Poor Advertising, Marketing
& Distribution
Porter’s 5 Force

5. Mindtree
Rev: $ 846 mil
Employees: 20000
Microland
Rev: $ 3 bil
Employees: 4200+
$ 857.1 K/employee!
Sonata
Software
Rev: $376 mil
Employees: 3500
Exl$ 883.1 mil
Employees: 29100
• Mid Level Service Industry
• Smaller Competitors form
formidable opponents because
of:
• Lesser service cost
• More Personalised Services
• More Flexibility
• Smaller Competitors:
• Evisipro
• Mindteck
• Exilant

6. High Low
Relative Market Share PositionIndustryGrowthRate
HighLow
Stars
Applications
Next Gen Offerings
Question Marks
Payment Solutions
Infrastructure Services
Cash Cows
SAP
Product Engineering
Governance & Risk Compliance
Dogs
BPO Services
BCG Matrix

7.  Growth in HP/DXC & Direct
International businesses
 New Contracts: $130mil (Q4 of
FY17-18) providing base of
continuing growth ahead of
NASSCOM’s forecast (7-8%).
 Aim: $1bil by Q3 of FY18-19
 Saturated in US (c. Donald Trump)
 Sales team in EU shores
 F2B strategy implementation
 Plant-centric factory floor networking
platform tracking scheduling, yield ,
control and optimization strategy.
 Operating margin band increased by 100
bps to 15-17% whilst making business
investments.
 Newest Acquisition for betterment of
Talent Pool
 Primary Focus: EU & Americas (ex. US)
 Vertical Focus Strategies:
 Cloud
 Digital
 Cognitive
 Traditional
 Dark Horse: Autocode.ai
 Transform ideas (whiteboards) to codes in hours
 Rapid prototype application
 Hyper personalized designs

8. 2006 by EDS
42% Stake @ $80mil
2008 by HP
HP acquiring EDS
60.2% Stake
50% Revenue from
HP
2016 by
Blackstone
80.4% from HP
Net: 60.47% Stake
Independent Unit
In addition to these, Mphasis sold majority of its BPO(‘Dogs’ remember?) units to
Hinduja Global Services(HGS) and Karvy Data Management Services(KDMSL) in2015
As a Major Strategy:
• Co. size small, Good Fundamentals: Acquire & Increase competence of workforce
• Co. size bigger, Mediocre Capability: Get Acquired & Partner up to sell competencies

9. 2002
Domain: BFSI
2004
$ 21 mil
Domain: Industrial
Automation(Apps)
2004
$ 680000
Domain: SAP
2005
$ 14 mil
Domain: Customer
Management Solution
2005
$ 16.5 mil
Domain: Healthcare
Acquisitions (2002-2005)
• All cash Deals
• Objective: Diversification in opetations
• Growth Rate:
• 7%(QoQ)
• 34%(YoY)
• Contribution:
• US: 77%
• EU: 14%
• India, Japan, APAC: 2% each
• Revenue: ₹ 580.6cr from ₹158.8cr

10. 2009
$27mil
Domain: Insurance
2010
$35mil
Domain: IT Infrastructure
2011
Domain: R&D
2012
$ 202 mil
Domain: Data Analytics
2018
$ 25mil
Domain: DevOps, DevSecOps
Acquisitions (2009-2018)
• All cash Deals
• Separate Operations
• Zero Layoff
• Objective: Further Diversification to survive
• 2010: 6th Indian IT firm to clock $1 billion in
revenue
• Growth Rate:
• 8.3%(QoQ)
• 29.6%(YoY)
• Contribution:
• 83% from next Gen Offerings &
Governance and Risk Compliance alone
• Revenue: ₹ 6377cr from ₹580cr in 2005
(@20% approx.)