Apart from HCL Technologies, TCS has been the most systematic player in the M&A game. In December 2001, the company put in place a specialist M&A team that would function as a think-tank on strategic acquisitions both in India and overseas. The team was led by Mahesh Bhandari and Debasis Pottdar, both former M&A specialists with Arthur D. Little and Arthur Anderson respectively.
Over the last four years, the M&A think-tank has guided TCS's spree of acquisitions, including the critical consolidation of its BPO holdings. It sold its stake in Intelenet, a joint venture with HDFC, and merged the Tata group's holdings in Airline Financial Services, WTI and Phoenix Global Solutions to create TCS BPO last year. In addition, it has also helped rationalise TCS's various joint ventures across the globe. And it has pushed through some critical deals like Computer Maintenance Corporation (CMC) in 2001 and Tata Infotech in April this year. Over the next few years, the M&A team will get busier with TCS actively going after overseas acquistions and, at the same time, consolidating the Tata group's IT holdings. Sources in the company say the Tata Infotech acquisition is the first step to integrating the Tata group's IT companies within TCS. When the process is complete, TCS's topline will get a fillip of an additional $1 billion, taking TCS past the $4-billion mark in revenues.
Acquisitions will also be used to strengthen domain presence, a process currently underway. The CMC acquisition gave TCS a foothold in the government sector. The company has earmarked 11 verticals and is reorganising its delivery centres and sales teams in India and globally. "This process will be complete by the year end," says Chandrasekaran. Infosys and Wipro have also aligned themselves along verticals in India, but they are yet to roll out globally.
Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.