Could an Indian IT supplier be about to buy Logica?

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Just been talking to a contact of mine and he told me that one of the big Indian IT suppliers has tabled a bid to buy logica.


There has been talk over the last couple of years that an Indian IT giant would buy a big European supplier. Logica would be a great way for an Indian supplier to break into the UK public sector. There are currently no Indian suppliers in the government's top 19 suppliers. But Logica is there.


HCL acquired SAP service provider Axon for £441m in August 2008 but a takeover of Logica by an Indian supplier would be a much bigger deal. Last year Logica had about 40,000 employees and revenue of £3.7bn.


A senior Indian IT executive said that the likes of Logica, Steria and Capita as well as other similar companies have been targets for some time.


Logica is already an Indian supplier in all but name. Many projects, including work for the public sector, have been shipped offshore or undertaken with onshored Indian Computer Trainees, and many UK staff have been replaced with Indians. Logica has been moving jobs offshore for years so this bid will probably make little or no difference to the prospects of its surviving UK-based workforce.

Logica is definitely a worth buy for the likes of Wipro,Infosys,NIIT,Syntel,Keane,HCL,TCS,Polaris, Patni,Cognizant.
It can give them
1.firm footprint across europe
2. US$ 5Bn revenue
3. 40000 employees( out of which 36000 are in europe only)
4. Management & Technology Consulting capabilities & competencies.
5. Entry to Govt sectors in Europe.
6. Local face(facade).
7. Direct access to 200+ clients in europe & australia.
8. Excellent Telecom,Energy & Utilites,Space & Defence know how.

I believe its not an expensive buy at US$ 4-5 Bn, when other smaller companies are getting sold off at much higher price(PE multipliers).

Buying logica can put the possible buyer in the league of Atos,Accenture,Capgemini,IBM,CSC,Perot,EDS
Steria etc.

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This page contains a single entry by Karl Flinders published on October 15, 2010 2:53 PM.

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