Channel: Companies

Thursday, December 02, 2010
Zensar acquires US co Akibia for $66 Mn
RPG group-owned Zensar Technologies acquired US-based infrastructure management company Akibia, in an all cash deal of $66 million.
 
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RPG group-owned Zensar Technologies acquired US-based infrastructure management company Akibia, in an all cash deal of $66 million. Under the terms of the agreement, Zensar has offered to acquire all of the outstanding stock of Akibia through a merger process with its wholly owned US subsidiary.

 

The acquired company Akibia is a key player in the infrastructure management space with revenues of over 100 million US Dollars and a robust management team in the US and Europe. Founded in 1988, Akibia is an independent IT services company which provides IT solutions that enable companies worldwide to optimize, secure, manage and support their mission-critical infrastructure. As an independent advisor, Akibia partners with customers to deliver solutions that improve the availability, reliability and performance of their data center, network and security infrastructure.

 

The acquirer Zensar Technologies is a technology company of RPG group.RPG Group is one of India's largest industrial conglomerates headquartered in Mumbai, India. It was founded by RP Goenka in 1979. Today the RPG Group is involved in diverse sectors of business, including power generation, power transmission, information technology, retail, and entertainment. The group recorded a turnover of around $ 4 billion for fiscal year 2010. The group plans to double revenue from the current $ 4 billion over the next three years. The goal is likely to be achieved through 75% of business growth for existing companies, and the rest through acquisitions.

 

Zensar Technologies is a globally focused software and services company spread across eighteen countries across the world. Zensar provides end-to-end services from IT development to Business Process Outsourcing, from consulting to implementation. With more than 5400 associates and sales and operations presence across US, UK, Germany, Sweden, Finland, Middle East, South Africa, Singapore, Australia, Japan and Poland, the Company delivers comprehensive services in mission-critical applications, enterprise applications, e-business, BPO Services.

 

With this deal, Zensar would now have more than 750 employees in the US of which more than 350 are local Americans. The deal also fits in with the larger economic agenda in the US of creating more jobs there. The two companies have earmarked an integration plan spread over the next two years. As part of the integration, Akibia will become a new business unit within Zensar. The expected revenue growth for Akibia’s existing business over the next year or two is 10-12%.

 

In recent years Zensar has done quite a few acquisitions and has also entered into partnership with various other companies. It acquired ThoughDigital for US $ 24.9 million in 2007 and Hyderabad based OBT global in 2005. It also established joint venture with Tokyo based EZA to form Zensar Advanced Technologies. Zensar is a channel and service partner of SAP. It has partnership with big firms like IBM, Microsoft and Oracle.

 

The acquisition of Akibia by Zensar is a further addition in the list of US-bound acquisitions by Indian IT companies in 2010. These acquisition are being driven by focus on non-linear services, vendor consolidation and emergence of cloud computing. In the first three quarters of 2010, Indian IT companies have done acquisition worth $ 200 mn around eight times the deal value in 2009. Remote infrastructure management, healthcare information technology, business intelligence and education sub-segments were attractive for acquisitions, given their untapped offshore opportunities and relatively higher margins.

 

More deals are likely to fall in place as some of Indian IT companies are looking for potential acquisition in US. The acquisition has become strategically important as the current US regime seems to be worried over outsourcing issues. Probably the huge forex reserve and ability to excel in global business are driving the Indian incorporate to go on spree for global acquisition. There is a strong possibility that in coming years Indian companies will have foothold in all functional domains across the globe. Truly said India is on rise.

 
 

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