Mid-size IT companies in acquisition mode
Mid-size IT and telecom cos are on an acquisition spree to differentiate themselves from bigger players in the industry, reports Venkatesh Ganesh.india Updated: Oct 24, 2006 15:06 IST
Mid-size information technology and telecom companies are on an acquisition spree in an attempt to differentiate themselves from the bigger players in the industry.
IT teaching company Aptech has made two acquisitions in the last three months. It acquired Pune-based Avalon aviation academy for an undisclosed sum. Following the Avalon acquisition, Aptech picked up a seventy per cent stake in Mumbai based Synergetics Information Technology Service India, a company that is into providing training solutions for the corporate sector. GTL Limited, a network solutions provider for enterprises is planning to acquire a leading UK-based network service provider for providing 3G services in India. Sources said that the deal would be announced on Tuesday.
Another mid-tier Indian software company Omnitech InfoSolutions is learnt to be in talks with acquiring a company in the US or UK. Omnitech had acquired US-based EdVenture systems for Rs 45 lakh in August.
Similarly, ICICI bank has picked up a 19 per cent stake in the Institute of Finance, Banking and Insurance (IFBI) that is being set up with NIIT.
Industry experts cite the growth in the domestic market and the increasing need for smaller Indian companies to differentiate themselves from the larger ones as the reasons for the spate of acquisitions.
"The companies like Aptech is looking to expand its portfolio of training solutions beyond IT and training in the aviation sector looks to be a hot area," says analyst from Motilal Oswal.
The company is looking to replicate its franchisee model for aviation-related training. "With this acquisition we are looking at providing infrastructure management solutions, which would give us better margins," says Atul Hemani, MD, Omnitech.
3G services is a niche area and companies such as GTL are looking to have an early mover advantage in this area," says Alok Shende of Frost and Sullivan. GTL is looking to tie up with either British Telecom or Vodafone for providing 3G services.
Recently, the government has announced a new policy that will enable 3G services in India and analysts expect the rollout to start by the second half of 2007.