Friday, June 22, 2012

Cognizant expected to pull in Genpact

IT services organization Cognizant Technology Solutions is soon to follow what tech corporations began doing lengthy back; getting into the Acquisition spree, offcourse. As cognizant looks around in its spree, it has been observed that the country's largest BPO, Genpact seems like a great catch. According to industry sources, the organization has been doing due diligence of BPO leader Genpact to locate a controlling stake because a month. As expected, if Cognizant finally acquires Genpact, it would be one of the largest technologies offers in India and would redefine the pecking order in India's IT industry."Cognizant is carrying out its due diligence of Genpact. The process started a number of weeks ago," sources conscious of the development stated. "Investors in Genpact is often looking for a 30% premium over its market value," they stated.BPO constitutes around 5% of Cognizant's revenues along with the company is aggressively preparing to plug the gap in its services portfolio. "Genpact was in talks with Infosys at the same time, still the conservative blue chip had reservations on the high valuations as well as the effect on its margins," sources stated. Genpact's margins were a little under Infosys's corporate average.Listed on the New York Stock Exchange, Genpact had revenues of $12 billion in 2009 and has a marketplace capitalisation of $5 billion. Cognizant, listed on Nasdaq, had revenues of $28 billion in 2009 and has issued assistance for $46 billion this year. When additional to the upper finish of Genpact's forecast of 17% growth in 2010, the mixture would yield $77 billion in greatest line.Genpact was founded in 1997 as an India-based captive company procedure services operation for General Electric Capital Corporation. Genpact later at the year 2004, began operating as an independent company and debuted on NYSE in 200 GE's shareholding at the enterprise has nowfive declined to 195 million shares or 14% after the business divested its shares in a secondary offering performed in March this year. General Atlantic and Oak Hill Capital hold 857 million shares or 41%, although Wells Fargo holds 146 million shares or 71%.An analyst stated Cognizant may be eying 51% stake to commence with. "It would be a ideal acquisition. Both corporations are procedure-driven. While Cognizant desperately needs BPO ability, there may perhaps not be a future for standalone BPOs in the future," he stated. BPO is getting taken as a massive differentiator and an entry point to cross-selling other IT services.

Ditulis Oleh : SeanAlan Fernandz // 9:48 AM
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