Major Acquisitions (2012-13) In IT Industry By Nirav Khandhedia


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Major Acquisitions In IT Industry By Nirav Khandhedia

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Major Acquisitions (2012-13) In IT Industry By Nirav Khandhedia

  1. 1. Major Acquisitions in IT Industry Year 2012-13 Nirav Khandhedia, 12030242017
  2. 2. Major Acquisitions in IT Industry Contents 2 Amdocs acquires Bridgewater Systems, 2012 ........................................................................................ 3 Amdocs acquires Actix, 2013 .................................................................................................................. 4 Amdocs acquires Celcite, 2013 ............................................................................................................... 5 TCS acquires French IT Services firm ALTI ............................................................................................... 6 IBM acquires Kenexa, 2012 ..................................................................................................................... 7 IBM Acquires Texas Memory System, 2012............................................................................................ 8 Wipro acquires Promax, 2012................................................................................................................. 9 Western Digital (WD) acquired Hitachi Global Storage Technologies (Hitachi GST), 2012 .................. 10 Infosys BPO acquires Portland Group Pty Ltd, 2012 ............................................................................. 11 SAP acquires SuccessFactors, 2012....................................................................................................... 12 References ............................................................................................................................................ 13 VAM – Executive MBA – 2012-15 – Symbiosis Centre for Information Technology
  3. 3. Major Acquisitions in IT Industry Amdocs acquires Bridgewater Systems, 2012 Amdocs (NYSE: DOX) acquired 25,178,827 common shares of Bridgewater Systems Corporation (TSX: BWC) ("Bridgewater"), a publicly held provider of policy management and network control solutions, representing 100 percent of Bridgewater's outstanding common shares, for CAD$8.20 per share in cash, through a wholly owned, indirect subsidiary of Amdocs. Prior to the acquisition, Amdocs did not own any securities of Bridgewater. The transaction is valued at approximately CAD$211 million. This acquisition enables Amdocs to offer pre-integrated charging and policy management solutions to enhance service provider data offerings. The acquisition will further expand Amdocs' Customer Experience Systems (CES) portfolio, allowing service providers to implement new value-based data monetization strategies to capitalize on the data explosion. Brian Shepherd, group president for Amdocs expressed that the strategic acquisition will enable service providers to completely redefine the real-time data experience and maximize the return on their network investments. Ed Ogonek, President and CEO for Bridgewater, mentioned that following this acquisition, service providers will be able to benefit from data experience solutions based on a pre-integrated combination of Amdocs' leading convergent charging technology and Bridgewater's advanced policy control capabilities that address the increase in demand for high-bandwidth services and the exponential growth of smart phones and other connected devices. Thus, while Amdocs and Bridgewater share numerous top-tier customers, including Bell Mobility, Sprint and Telstra, the acquisition will create synergy in product and solution, and Amdocs will be able to benefit the customers with most advanced solution. VAM – Executive MBA – 2012-15 – Symbiosis Centre for Information Technology 3
  4. 4. Major Acquisitions in IT Industry Amdocs acquires Actix, 2013 Amdocs (NYSE: DOX), the leading provider of customer experience systems and services, acquired privatelyheld Actix, the leading independent software provider of mobile network optimization solutions, for approximately $120 million in cash. This acquisition expands Amdocs' customer experience portfolio further into the network domain to manage customer experience across both networks and IT. With this acquisition Amdocs expands its CES (Customer Experience Systems) portfolio with geo-located network data that will drive a variety of optimization use cases. The acquisition positions Amdocs as the first vendor to offer customer experience-driven network optimization based on a holistic view of the customer experience across all networks, BSS and OSS (business and operational support systems). Amdocs and Actix together will create synergy in terms of better product to enhance customers’ revenues. Geo-located network information provided by Actix's solutions, combined with customer data and capabilities from Amdocs' market-leading policy management, BSS and OSS systems, will allow service providers to support sophisticated customer experience use cases and take proactive action based on network performance to modify and improve the experience of a specific customer or group of customers. As a result, service providers will be able to differentiate the customer experience and achieve cost-efficiencies with improved automation and optimization of their existing networks, as well as when rolling out new network technologies, such as LTE and small cells. Bill McHale, chief executive officer of Actix, understands that together, Amdocs and Actix, will continue to pioneer development in network optimization, enhancing the position as the leading provider of network-independent solutions in this area. The combination of assets, spanning network and IT, will offer service providers the most powerful customer experience driven network optimization solution available. Rebecca Prudhomme, vice president of product and solutions marketing for Amdocs, says "With this acquisition, Amdocs will continue to lead the way in customer experience innovation, Linking network knowledge to customer insight, we will continue to deliver on the promise of our CES 9 portfolio to help service providers unleash the power of experience, while delivering operational efficiencies." VAM – Executive MBA – 2012-15 – Symbiosis Centre for Information Technology 4
  5. 5. Major Acquisitions in IT Industry Amdocs acquires Celcite, 2013 Amdocs (NYSE: DOX), the leading provider of customer experience systems and services, acquired substantially all the assets of Celcite Management Solutions LLC for approximately $129 million in cash. This acquisition expands the Amdocs customer experience portfolio further into the network software domain to manage customer experience across both networks and IT. The acquisition of Celcite builds upon and enhances the recent acquisition of Actix, and demonstrates Amdocs’ continued commitment to its network software and services strategy. By combining Actix’s market leading products with Celcite’s comprehensive network management and Self Optimizing Networks (SON) services and offering capabilities, Amdocs will be able to offer service providers comprehensive equipment-agnostic optimization solutions. In addition, Amdocs will be expanding its CES (Customer Experience Systems) p portfolio with quality-ofservice (QOS) focused, geo-located network data that will drive a variety of optimization use cases. The acquisition will position Amdocs as the first supplier to offer customer experience-driven network optimization software and services based on a holistic view of the customer experience across all domains. Working as one, Amdocs, Actix and Celcite will be able to provide communication service providers around the globe with a wide range of product-led services to better optimize their hybrid mobile networks, including solutions that can accelerate the rollout of existing networks and new network deployments such as LTE, Wi-Fi and small cells. These solutions will be agnostic to manufacturers of network equipment and components. In addition to product and solution synergies, Amdocs and Celcite share several top tier customers. Rahul Sharma, founder and chief executive officer at Celcite says “Together, Amdocs, Celcite and Actix will emerge as the preferred provider of network management and SON solutions to service providers worldwide. With the combination of our people, assets, and product/services expertise, we will offer unmatched end-to-end offerings to relieve customers’ core network challenges, including capacity and rollout, and help them tie the customer experience to the network in real-time.” Rebecca Prudhomme, vice president of product and solutions marketing at Amdocs, says “Amdocs customers must optimize their networks to handle the data explosion and reduce associated costs. One of their largest pain-points is dealing with issues that arise within the radio network, which are typically responsible for a large percentage of all customer satisfaction and churn problems. The acquisition will enable Amdocs to better offer our customers’ solutions (both products and services) for the management and Radio Access Network (RAN) optimization of all mobile networks including 2G, 3G, LTE and small cells to maximize the return from their network assets.” VAM – Executive MBA – 2012-15 – Symbiosis Centre for Information Technology 5
  6. 6. Major Acquisitions in IT Industry TCS acquires French IT Services firm ALTI Tata Consultancy Services (BSE: 532540, NSE: TCS), a leading IT services, consulting and business solutions firm, completed the acquisition of ALTI SA during an official ceremony under the patronage of Arnaud Montebourg, Minister for Economic Regeneration for the French Republic. The CEO and Managing Director for TCS, N Chandrasekaran, and ALTI’s founders signed the final agreement to commence the integration of ALTI into TCS’ operations in France. The acquisition had been initially announced in April 2013. A privately-held company with revenues of €126 million in 2012, Alti SA is regarded as one of the top 5 system integrators of SAP solutions in France. It includes several top French corporations in the banking, financial services, luxury, manufacturing and utilities sectors as its key customers. During the official ceremony, TCS unveiled plans to further activate the capabilities and the talent pool it has acquired, by setting up a new TCS SAP Innovation Centre. The centre will seek to develop cutting edge enterprise solutions for multiple industries, in co-innovation with TCS’ customers. N Chandrasekaran, CEO and Managing Director, TCS, said, “Today is a historic day for our company in France, which will see us emerge as a much stronger player in the local market and sets the platform for our future growth in the region. There are tremendous synergies between TCS’ global capabilities and Alti’s local talent base and knowledge, which will enable us to better service our clients in France and help make their businesses more competitive. As a long term strategic market for TCS, with leading-edge infrastructure and a highly skilled engineering talent pool, France was a natural destination for us to invest in toward our future growth.” Arnaud Montebourg, The Minister for Economic Regeneration of the French Republic, said, “The important investments made by TCS in its two sites in France (Ile-de-France and Lille) since February 2013 are true testimonials to the capability of France to welcome and integrate companies from abroad that have installed themselves on our soil.” In recognition of these initiatives, the company had been conferred the special award for Investment and Innovation by the Greater Paris Investment Agency in 2012. This acquisition will increase the company’s employee base in France by 500% and propel it into the list of the top IT services firms in the country. VAM – Executive MBA – 2012-15 – Symbiosis Centre for Information Technology 6
  7. 7. Major Acquisitions in IT Industry IBM acquires Kenexa, 2012 IBM (NYSE: IBM) closed its acquisition of Kenexa in Dec 2012. Kenexa bolsters IBM's leadership in helping clients embrace social business capabilities while gaining actionable insights from the enormous streams of information generated from social networks every day. The net purchase price is approximately $1.3 billion. Kenexa, a leading provider of recruiting and talent management solutions, brings a unique combination of Cloud-based technology and consulting services that integrates both people and processes, providing solutions to engage a smarter, more effective workforce across their most critical business functions. Kenexa complements IBM's strategy of bringing relevant data and expertise into the hands of business leaders within every functional department, from sales and marketing to product development and human resources. "By creating a smarter workforce, employees can drive innovation to bring products and services to market faster, resolve problems before they arise to improve customer service, and increase sales by building new skills -- linking the right experts to the right clients," said Alistair Rennie, general manager, social business, IBM. "The combination of Kenexa's world-class human capital management solutions and IBM's social business and analytics leadership uniquely positions IBM to help clients generate real returns from their social business investments, while helping them to be more competitive in their markets." Kenexa is an industry leader in cloud-based software and recruiting process outsourcing (RPO.) Kenexa supports more than 8,900 customers across a variety of industries, including financial services, pharmaceuticals, retail and consumer, including more than half of the Fortune 500. Since IBM announced its intent to acquire Kenexa in August, Kenexa saw continued momentum with customers around the globe. Kenexa has signed sizeable, multiyear contracts with several major companies, and recently announced that Cargill, an international producer and marketer of food, agricultural, financial and industrial products and services, has signed a three-year agreement to use Kenexa to implement, develop and oversee an employee engagement survey to its entire workforce of 140,000 employees around the world. More than 60 percent of Fortune 100 companies have licensed IBM's solutions for social business. With closing of this acquisition approximately 2,800 Kenexa employees in 21 countries joined IBM. Consistent with its strategy, IBM continues to support Kenexa clients and enhance Kenexa technologies while allowing these organizations to take advantage of the broader IBM portfolio. VAM – Executive MBA – 2012-15 – Symbiosis Centre for Information Technology 7
  8. 8. Major Acquisitions in IT Industry IBM Acquires Texas Memory System, 2012 IBM (NYSE: IBM) completed its acquisition of Texas Memory Systems (TMS), a privately held company based in Houston, Texas. Financial terms of the deal are not disclosed. TMS is a leading developer of highperformance flash memory solutions. Founded in 1978, TMS designs and sells solid state memory solutions as the RamSan family of shared rackmount systems and Peripheral Component Interconnect Express (PCIe) cards. The products are designed to help companies improve system performance and reduce such critical issues in the data centre as server sprawl, power consumption, cooling, and floor space requirements. Leveraging such solutions can help organizations save money, improve performance and invest more in innovation. “Flash technology is a game changer for our clients and IBM is committed to delivering industry-leading Flashoptimized capabilities as a cornerstone of our Smarter Storage strategy," said Brian Truskowski, General Manager, IBM System Storage and Networking. "The TMS solutions extend our broad portfolio of Flashoptimized storage arrays and flash optimization software, providing our clients unmatched value.” IDC estimates the amount of solid state storage solutions being shipped into the enterprise will grow significantly, reaching nearly 3 Exabyte by 2016. TMS, powered by 100 skilled employees, will be integrated into IBM Systems and Technology Group. With acquisition being completed, IBM plans to invest in and support the TMS product portfolio, and will look to integrate over time TMS technologies into a variety of solutions including storage, servers, software, and PureSystems offerings. “IBM understands the positive and dramatic impact that solid state technology can have on storage and server infrastructures, and once the acquisition is complete we look forward to advancing the technology even further. With the global reach of IBM, we expect to grow the engineering staff and product lines much faster than we could before,” said Holly Frost, founder and CEO of TMS. VAM – Executive MBA – 2012-15 – Symbiosis Centre for Information Technology 8
  9. 9. Major Acquisitions in IT Industry Wipro acquires Promax, 2012 Wipro Limited acquired Promax Applications Group (PAG), a leading player in trade promotion planning, management and optimization solutions space for a total purchase consideration of AUD 35 million, in an allcash deal. PAG, having revenues worth AUD 15-16 million, is headquartered in New South Wales, Australia and has over 45 customers across verticals, like F&B, OTC pharmaceuticals and beer. As per industry estimates, consumer-focused companies spent 12 to 25 per cent of their gross annual sales on trade promotions. Organizations were increasingly leveraging analytics to enhance effectiveness and maximize the return on investment (ROI) of their spending on trade promotions, stated an official release. K.R. Sanjiv, senior vice-president and global head, Analytics and Information Management, Wipro, said, "Analytics is a key growth driver of Wipro's growth strategy. The acquisition of Promax Applications Group will strengthen our positioning and capability in management, analytics & optimization of trade promotions, and further extends our leadership in analytics and information management services." Combining PAG's deep industry expertise with Wipro's proven experience in delivering large business solutions to global clients would enable their clients to maximize the ROI of Trade Promotion spends and will create synergy for the Wipro and acquired PAG. Don Nicol, CEO of PAG, added, "PAG will help Wipro to differentiate its offerings in the trade and marketing management space through an added value proposition. The combined entity will provide clients access to an enhanced portfolio of technologies and solutions, and provide employees enhanced training, growth and career opportunities." Avendus Capital acted as the exclusive financial advisor to Wipro on this transaction. The newly formed entity is called as Wipro Promax Analytics Solutions Pty Ltd. VAM – Executive MBA – 2012-15 – Symbiosis Centre for Information Technology 9
  10. 10. Major Acquisitions in IT Industry Western Digital (WD) acquired Hitachi Global Storage Technologies 10 (Hitachi GST), 2012 Western Digital Corp. (NYSE:WDC) acquired Viviti Technologies Ltd. (formerly Hitachi Global Storage Technologies), effective Mar. 8, 2012, for $3.9 billion in cash and 25 million shares of WDC common stock valued at approximately $0.9 billion. Hitachi, Ltd. now owns approximately 10 percent of WDC shares outstanding, and it has the right to designate two individuals to the board of directors of WD. The cash portion of the purchase price was financed by a $2.3 billion, five-year term loan, short-term financing under a $500 million revolving credit agreement and existing company cash balances. The company expected the transaction to be immediately accretive to earnings per share on a non-GAAP basis, excluding acquisitionrelated expenses, restructuring charges and amortization of intangibles. In addition, the company expects to maintain a positive net cash position. The new WD operates with WD Technologies (WD) and HGST as wholly owned subsidiaries. Aggregated revenues of the two companies in 2011 were $15 billion. "The completion of this acquisition is a truly momentous event in the 42-year history of our company," said Coyne. "With ownership of two successful companies and the best talent available in the industry, we expect to accomplish great things as we build the new WD to be the world's leading storage solutions provider with the industry's deepest technology capability, broadest product portfolio and best-in-class execution. Similar to successful multi-brand models in other industries, the two subsidiaries will compete in the marketplace with separate brands and product lines while sharing common values of customer delight, value creation, consistent profitability and growth." "With a significantly broadened customer base and expanded resources, the new WD is in a strong position to seize the growth opportunity in stored digital content," said Coyne. "We have acquired a strong presence in the traditional enterprise market, substantially increased our presence in the industry's fastest-growing segmentscloud and mobility-and improved our capability to address new market initiatives such as enterprise SSD, storage solutions for small business and low-profile HDDs and hybrid drives for Ultrabooks™. As a result, WD is better positioned than ever for success." VAM – Executive MBA – 2012-15 – Symbiosis Centre for Information Technology
  11. 11. Major Acquisitions in IT Industry Infosys BPO acquires Portland Group Pty Ltd, 2012 Infosys BPO Limited, the business process outsourcing subsidiary of Infosys Limited (NASDAQ: INFY), acquired all of the outstanding share capital in Australia-based Portland Group Pty Ltd, a leading provider of strategic sourcing and category management services, for consideration of AUD 37 million. Portland Group was founded in 1999 and today counts several large ASX 200 organizations within the Australia region as clients. It is headquartered in Sydney and has offices in Melbourne, Brisbane, and Perth. The company reported revenue of approximately AUD 31.3 million for the fiscal year ending 30 June 2011. The company employs 113 professionals. Swaminathan D, CEO and MD, Infosys BPO said, "We are delighted to have an outstanding team of domain specialists in Portland Group join us. This acquisition would significantly deepen our capabilities and domain expertise in our Sourcing and Procurement practice. Further in a dynamic marketplace such as Australasia this will strengthen the top-end of our service offering in the strategic sourcing and category management functions. This will also enhance the competitiveness, spread of offerings and global reach for our clients." Gavin Solsky, CEO of Portland Group Pty Ltd said, "We believe the combination of Portland Group and Infosys will provide our clients with a highly compelling proposition that does not currently exist in the sourcing and procurement services market in Australia. It will allow us to offer our clients a truly integrated and globally competitive solution to deliver procurement benefits in the most effective and efficient way possible." Portland Group's expertise in strategic sourcing and category management services is expected to complement Infosys BPO's global Sourcing & Procurement capabilities to create a market offering that will positively impact client's business efficiency and effectiveness. VAM – Executive MBA – 2012-15 – Symbiosis Centre for Information Technology 11
  12. 12. Major Acquisitions in IT Industry SAP acquires SuccessFactors, 2012 SAP America acquired SuccessFactors, Inc. (NYSE: SFSF) ("SuccessFactors"), the market-leading provider of cloud-based human capital management (HCM) solutions, pursuant to which a subsidiary of SAP offered to acquire all outstanding shares of common stock of SuccessFactors for $40.00/per share in cash, representing an enterprise value of approximately $3.4 billion. The acquisition was completed via a short-form merger under Delaware law pursuant to which Saturn Expansion Corporation, an indirectly wholly owned subsidiary of SAP, was merged with and into SuccessFactors, with SuccessFactors surviving the merger as a wholly owned subsidiary of SAP America, Inc., the U.S. operating subsidiary of SAP AG. As a result of the merger, all outstanding shares of SuccessFactors that were not tendered into the previously completed tender offer (other than shares held by SuccessFactors, SAP America or any of their wholly-owned subsidiaries, and shares held by stockholders that properly exercise appraisal rights under Delaware law) were converted into the right to receive $40.00 per share in cash without interest and subject to any required withholding of taxes, the same consideration paid to stockholders in the tender offer. SuccessFactors notified the New York Stock Exchange, Deutsche Börse, and the Professional Segment of Euronext Paris of the completion of the acquisition and trading of shares of its common stock were suspended on February 23, 2012 on each exchange pending delisting of such shares. The acquisition adds SuccessFactors’ widely respected team and technology to SAP’s powerful cloud assets, significantly accelerating SAP’s momentum as a provider of cloud applications, platforms and infrastructure. The combination of SAP and SuccessFactors establishes an advanced end-to-end offering of cloud and onpremise solutions for managing all relevant business processes. VAM – Executive MBA – 2012-15 – Symbiosis Centre for Information Technology 12
  13. 13. Major Acquisitions in IT Industry References 13 VAM – Executive MBA – 2012-15 – Symbiosis Centre for Information Technology