Analysts are expecting more IT services deals in the wake of Dell Inc.'s (NASDAQ:DELL) $3.9 billion acquisition of Perot Systems Corp. (NYSE:PER) and Xerox Corp. (NYSE:XRX) buying document and BPO company Affiliated Computer Services Inc. (NYSE:ACS) for $6.4 billion.
Reuters gathered a list of the
most likely to be acquired based on analyst predictions:
- Sapient Corp. (NASDAQ:SAPE),
- Computer Sciences Corp. (NYSE:CSC),
- WNS Global Services,
- Amdocs Ltd. (NYSE:DOX), which bought Changing World Ltd. for $60 million last year,
- Cognizant Technology Solutions Group (NASDAQ:CTSH),
- ExlService Holdings Inc. (NASDAQ:EXLS),
- Hewitt Associates Inc. (NYSE:HEW)
- Jack Henry & Associates Inc. (NASDAQ:JKHY) and
- Genpact Ltd. (NYSE:G)
Likely acquirers of course include giants like IBM Corp. (NYSE:IBM), Cisco Systems Inc. (NASDAQ:CSCO), Hewlett-Packard Co. (NYSE:HPQ), BT Group plc (NYSE:BT), Deutsche Telekom AG (NYSE:DT) and Asian companies like Hitachi Ltd. (NYSE:HIT).
A restructuring Accenture Ltd. (NYSE:ACN) could be
an acquirer or
target.
Middle-market M&A action
Xerox CEO Ursula Burns called the BPO market a fragmented space. There's been some de-fragmenting, though.
Last year, Tata Consultancy bought Citigroup Global Services Ltd., the India-based back-office unit of Citigroup Inc. (NYSE:C), for $505 million in cash. Also last year, Indian BPO WNS Global bought the India- and Sri Lanka-based operations of U.K. insurance group Aviva plc for $201 million, and HCL Technologies Ltd. bought Axon Group plc for $784 million. In December, Citi Technology Services Ltd. was sold to Wipro Technologies for $127 million. Earlier this year, Cognizant Technology was mentioned as a bidder for either part or all of fraud-hit Indian IT outsourcer Satyam Computer Services Ltd. Tech
Mahindra Ltd.
won the stake. It was recently reported that
Mahindra and Satyam could merge.
More recently, IBM said it's
acquiring Bank of America Corp.'s (NYSE:BAC) Wilshire Credit Corp., including the Wilshire mortgage servicing platform. A day after that, Sykes Enterprises Inc. (NASDAQ:SYKE) said it's acquiring BPO provider ICT Group Inc. (NASDAQ:ICTG) for $263 million.
Indian IT services giant Infosys Technologies Ltd. (NASDAQ:INFY) recently said it's
looking to acquire companies in Japan and Germany with revenues of about $400 million. And Exlservice Holdings wants to beef up as well. Earlier this month, Innovation Group plc, a U.K. BPO and software company, revealed it rejected a bid from ExlService.
An eye on healthcare IT
Dell CEO Michael Dell recently told Bloomberg News, "When you look at the healthcare space, it's the one sector of the economy that has the least amount of IT, and we see it as
very promising for growth." In June, Harris Williams & Co. managing director David Joncas told us "
healthcare IT is highly fragmented." Jonas, co-head of TMT at Harris Williams, said most of the work his unit was getting in the first half of the year had to do with healthcare IT.
Perot Systems is getting deals done while it's being acquired by Dell. Perot is
acquiring BearingPoint Management Consulting (Shanghai) Ltd. and recently won some contracts in China's healthcare and manufacturing sectors. Earlier this week, Perot forged
an alliance with China Telecommunications Corp. to deliver IT services to the healthcare industry.
Dell said his company is especially interested in healthcare-related
deals. Also, Xerox's Burns pointed out that ACS is probably the world's
leader in healthcare business processing. -
Baz HiralalAlso see:
Potential IT acquisitions to watch
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Adele Gulfo
And the winners are...
Pretty accurate list from what I've been reading. Looks like everyone wants in on the health care industry.