Rolta set to acquire Chicago IT firm for up to $50 million

[OhioChick]

Source: Economic Times India

29 Jul, 2008, 0104 hrs IST,N Shivapriya, ET Bureau

MUMBAI: Mid-size IT and engineering services firm Rolta is close to acquiring a Chicago-based software firm. The deal size is expected to be around $40-50 million. Although the identity of the target company could not be ascertained, sources said the acquisition was in the area of business intelligence software. An announcement to this effect is likely to made in the next few days, they said.

When contacted, Rolta’s chairman and managing director K K Singh said the company continued to evaluate acquisitions that were strategic to its business, but declined to comment on whether it had closed an acquisition deal with a Chicago-based IT firm.

"We are exploring a number of opportunities. But there is nothing to announce," he said.

However, a market analyst said an acquisition could be round the corner. “I won’t be very surprised if they announce another acquisition. They had raised about $150 million through FCCBs about one-and-a-half year ago, specifically for the purpose of acquisitions,” said the analyst who did not want to be named.


Read more: http://economictimes.indiatimes.com/Infotech/Software/Rolta_set_to_acquire_Chicago_IT_firm_for_up_to_50_million/articleshow/3299380.cms

[Catch22Dem]

1. What the hell kind of IT firm can you buy for $50M?

I think that's our quarterly budget!

[babylonsister]

2. Have a lot of firms in the US been bought out by Rolta and others

like them? This isn't just outsourcing, is it. :(

[OhioChick]

3. Yes, it's a growing trend...

According to the article, Satyam Computer Services had acquired Bridge Strategy, a Chicago-based firm operating in a similar business, in the fourth quarter of the last fiscal for $35 million.

Not good. Buying up of American assets.

[Pavulon]

5. Until they learn to work off script

they have a very narrow use. Indian nationals who have excellent skills have figured out that they would rather come here and earn without working for tata or the others.

[Pavulon]

4. Lots of shitty companies try to be less shitty through

acquisition. The numbers behind using these people are starting to falter.

[Xithras]

6. It's a fronting strategy.

There are many companies that actually DO refuse to do business with foreign outsourcers, but which contract IT services with other American companies. By buying American IT firms, the Indian firms gain two things. First, they get the revenue streams from the American firms existing American clients. Second, and more importantly, they get to continue marketing themselves in the U.S. using established American brands. Instead of dealing with an "Indian" company, you get to deal with an American company that just happens to be owned by an Indian company. It's a great way around Buy American rules.

The net result is the same for the workers though. Sales and marketing staff may be retained, but technical workers will lose their jobs. Their tasks will now be handled by someone in India.

[OhioChick]

7. Terrific Analysis. n/t

[OhioChick]

8. Formally announced today...

Rolta to acquire WhittmanHart Consulting

Tue Jul 29, 2008 10:16am IST

MUMBAI, July 29 (Reuters) - IT and engineering services firm Rolta India Ltd (ROLT.BO: Quote, Profile, Research) on Tuesday said it has acquired Chicago-based WhittmanHart Consulting, a division of WhittmanHart Inc.

"We have just signed the agreement for the acquisition. The size of the deal and other financial details will be decided later," Chief Financial Officer Hiranya Ashar told Reuters. (Reporting by Janaki Krishnan; Editing by Ramya Venugopal)

http://in.reuters.com/article/domesticNews/idINBMB00256420080729