The Hindu Business Line : Satyam buys Bridge Strategy for $35 m

Hyderabad, Jan. 21 Satyam Computer Services on Monday announced the acquisition of a Chicago-based management and consulting firm Bridge Strategy Group, for $35 million, in an all-cash deal.

This enhances Satyam’s consultancy services capability. Bridge had revenues of $17 million last fiscal.

Effectively, this forms the fourth acquisition for Satyam in the last two years, as the company continues to scout for more acquisitions. The merger and acquisitions group is extremely active and is constantly evaluating options, according to Satyam CFO, Mr V. Srinivas.

The President of Satyam Healthcare, Mr Ram Mynampati, said that the enterprise consultancy business contributes to about 9-10 per cent of total revenues. As Satyam enhances its efforts to step-up consultancy work, this acquisition would be extremely strategic.

The President of Bridge Strategy, Mr Stephen E. Sheridan, said: “The strategic business problems clients face frequently call for complex business processed technology solutions, which makes this merger a natural fit. This will enhance professional services portfolio.”

Bridge brings 36 consultants and of the $35 million payout, $19 million is the initial payment and the balance is to be paid over the next two and a half years.

Satyam also invested $65 million to buyout the two early investors in Nipuna Services (now Satyam BPO).

As per the scheduled plan, Satyam management acquired Olympus and Intel Capital stake in Satyam BPO, Mr Srinivas said.

One of the groups that has significant growth prospects is the consultancy aspect of Satyam business. While it is difficult to segregate this as a separate practice, this brings expertise from different verticals within the company. As enterprises lately refer business transformational deals, this assumes importance, Mr Mynamati explained.

Sports practice

During the third quarter, Satyam created a Sports Practice to accommodate the increasing service requirements of professional sports associations and federations. The company has partnered with FIFA, the governing body of football, and has become the official IT services provider for World Cup, the largest sporting event.

The company also introduced an anti-money laundering solution and an innovative software as a service option to serve small and medium enterprises business to assist them in their transformational needs.

Satyam BPO posted revenues of $15.3 million and a net loss of $2.4 million. It has provided revenue guidance of $61 million, which reflects a growth of 60 per cent over the previous fiscal. This arm signed two new customers.

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