Possible acquirers could be tech giants such as IBM , Hewlett-Packard or Cisco, European players like BT or Deutsche Telekom and Asian companies like Hitachi , Fujitsu or NEC, analysts said. "There's definitely going to be some strategic acquisitions -- there's no doubt about that," Goldman Sachs analyst Julio Quinteros said. "It's just, how much are you willing to pay? And would you rather wait for the market to come back a little bit?" The recurring revenue stream that IT services firms have gives them more visibility and stability.
... One group of services firms that are likely to be involved in M&A are the Indian outsourcers. While most analysts say they are more likely acquirers, Goldman's Quinteros sees it both ways. "I can also make the case that they could be takeout candidates because they have not done an effective job in really moving up the food chain, bringing the value-add competency to the skill-set table," he said.
Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at email@example.com