Technology M&As in India - A Digital Revolution.pdf

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Executive Summary

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  • M&As growth story:
M&As
2016
2017(Jan)-2018 (May)
·         By volume (nos.)
251
316
·         By value ($ billion)
4.4
9.31
By category (% share of volume)
·         Domestic
65%
55%
·         Inbound
18%
24%
·         Outbound
17%
21%
1 Excludes Walmart-Flipkart deal value ($16 billion)

 

  • Key findings:
    • M&As in digital gaining market share
    • Digital-focus on SMAC, Digital Marketing, Payments
    • Acquisitions by MNCs (20% share)
    • Non-tech firms acquiring Tech firms to scale Digital capabilities
    • Select Tier-II/III locations in India seeing traction

 

  • Key segment analysis:
    • IT-BPM: 55% share; 40% of these focused on Digital
    • Internet & eCommerce: 102 M&As, incl. Start-ups: ~70% around Online services
    • Start-ups: Majority M&As (80%) around Digital services: Utility Services, Payments, Aggregators

 

  • Key strategic drivers for M&As:
    • Acqui-hire (talent); HCL Technologies takeover of Merck’s life sciences business
    • Access to new customers; Capillary Technologies’ takeover of Exclusife (startup)
    • Expand into existing or new geographies / verticals; e.g., Tata Technologies’ acquisition of Escenda Engg
    • Attain market leadership; e.g., Altran’s takeover of Aricent
    • Access to niche technology; Cyient’s takeover of B&F Design
    • Expanding products & services portfolio; L&T Tech’s acquisition of Esencia

 

  • Digital M&As:
    • Cumulative deal value: $ 1.5 billion, 16% of total cumulative industry value
    • SMAC stack accounts for ~50% of digital deals
    • Other areas of interest: Digital marketing (Infosys-Wongdoody), payments (OMA Emirates-MobiSwipe Tech), IoT (Happiest Minds- Cupola)

 

  • M&As-Increasing non-tech play:
    • Cumulative deal value: $ 315 million
    • Domestic M&As growing fastest at 26% CAGR
    • Primary interest in start-ups space: Aggregators, Retail, Payments

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