TCS eyes multi-million $ acquisition | Latest News India - Hindustan Times
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TCS eyes multi-million $ acquisition

PTI | By, New Delhi
Nov 19, 2004 01:46 AM IST

Tata Consultancy Services has a clearly defined agenda going forward. It is aiming to become a $3 billion company by March 2006. It is aggressively scouting for global software companies of reasonable size, while planning to merge all IT companies of the Tata group.

Tata Consultancy Services has a clearly defined agenda going forward. It is aiming to become a $3 billion company by March 2006. It is aggressively scouting for global software companies of reasonable size, while planning to merge all IT companies of the Tata group.

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TCS is believed to be in negotiations with large companies in the aviation and telecom software space in Europe. It is hoping to finalise the multi-million dollar deals at the earliest.

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“TCS is focused on inorganic growth, particularly in the European market,” said Phiroz Vandrevala, executive vice-president, TCS. “Some of the global giants in the telecom and aviation space are looking at divesting their captive businesses to cut cost over a period of three years. TCS is interested in such companies, which will give us synergies and long-term business,” he added.

While, Vandrevala remained non-committal on the size and timing of the deal, he said some of the European markets are very tough because of local factors.

“Since the company is generating good profits, the deal can be funded through internal accruals. In case the size is really large, we may even use a combination of equity and cash,” he added.

Before a US listing, the group will have to re-examine whether it needs to merge other group IT companies like Tata Elxsi and Tata Infotech and possibly merge them with TCS.

Refusing to comment on the issue,  another senior Tata Group official said, “In all likelihood a proposal to this effect will be brought at the TCS board meeting in the month of February. In January, the company will announce the third quarter results and then in the subsequent month a broad policy decision will be taken.”

On future outlook for the company, officials said the company is poised to cross the $2 billion mark in the current fiscal. In case, the group restructuring (read merger) takes place in 2005, TCS will touch $3 billion turnover in the fiscal ending March 2006. And, if it also manages to acquire a European company of reasonable size, the turnover will be much more.

The size of the company TCS is looking to acquire is $100-500 million. This will give us a headstart in that geography, he added.

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