The Hindu Business Line : Hungry for acquisitions

Perot Systems, a $2.6 billion US-based company which acquired Vision Healthsource, a Chennai-based firm, is keen to acquire companies in the healthcare space, possibly in India. Speaking to Business Line, Mr Peter Altabef said, “India’s spend on healthcare is only 0.9 per cent of GDP. And, the technology spend within that is surely negligible. Both these ratios are bound to rise.”

He does not have a target in terms of annual revenues or manpower strength but said, “We don’t want to acquire for scale, but we do look at economic return criteria and for strategic ability.” He also clarified that there aren’t a lot of Indian software companies servicing the Indian healthcare market, which narrowed down his options.

He also predicted that with the economic cycle going into a descent, the maintaining captive IT arms for non-IT could become more challenging.

Zensar Technologies, which acquired EZA and Thought Digital recently, is looking to acquire a company in Europe, particularly in the region covering Germany, Austria and Switzerland. According to Mr Ganesh Natarajan, Vice-Chairman and MD, Zensar, “We had tried recruiting top management people there but have not seen revenue ramp-up. It is important for us to have a presence in Germany and address the other two countries from there.”

He adds, “There is now an opportunity to go value-picking. Typically, an American acquisition would be 0.7 times the annual revenue of the target company.” In this case, the acquisition in Germany, when it happens, would allow Zensar entry into that geography and may not be meant to give it scale.

Mastek Ltd, the Mumbai based software company, is also keeping a nose out for acquisitions. Mr Sudhakar Ram, CEO, Mastek, told the media here that the company has earmarked $40 million to acquire companies servicing the insurance companies and government agencies. “We are speaking to a few companies. These are based in the US or in Europe,” Mr Ram said, without revealing further details.

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