The Hindu Business Line : ‘Big jump in outbound deals in last 3 years’

New Delhi, Nov. 12 The IT and ITeS industry logged 175 deals — both mergers and acquisitions and private equity transactions combined — valued at about $3.59 billion during the first nine months of 2007, as Indian companies continued to fuel global ambitions by acquiring international businesses. While 120 acquisition deals accounted for an announced value of $2.54 billion during January to September, there were 55 private equity deals with an announced value of $1.05 billion. “In the first nine months of 2007, there were 75 crossborder deals (those involving Indian IT/BPO companies acquiring overseas firms or vice versa) valued at about $2.19 billion,” according to data by Grant Thornton.

The last thee years have seen a remarkable surge in outbound deals which grew from $0.4 billion in 2005 to $1.37 billion in 2006 and to over $2.03 billion this year so far. The inbound deals have declined from $0.85 billion in 2005 to $0.69 billion in 2006 and to $0.16 billion in 2007 year to date.

The number of deals by Indian firms abroad in IT & ITeS sector was more than triple the number by international companies in India. In terms of announced value, outbound deals were ten times more than that of inbound deals.

“Clearly there is a surge in outbound acquisition, as Indian companies look for ways to counter the appreciating rupee by diversifying their revenue and cost base,” Mr Harish H.V., Partner- Corporate Advisory Services and Head - South India, Grant Thornton said.

Domestic deals, which stayed relatively constant over 2005 and 2006 at 25, grew to 45 this year (January-September 2007). The deal value, which grew significantly from $0.09 billion (2005) to $0.85 billion (2006), however, tanked to $0.36 billion in the first nine months in 2007.