The Satyam buyout gives the tech firm a chance to diversify away from telecom, something it badly needed to do. It shouldn't be too difficult for Satyam to be able to turn in an operating profit of close to Rs 1,000 crore in 2009-10, so that would translate into an EV/ebitda of 8.4 times for the company.
TM has an agreement with the Union of European Football Associations, while Satyam has signed up with Fifa. A Satyam spokesperson said: "Tech Mahindra has been providing mobile streaming services to Uefa, besides other telecom services. The company will support us by offering its technology expertise in football. We will go together for the two World Cups." TM and Satyam's alliance on sports may not end with the World Cup and may expand to other disciplines as well.
The merger process started four years ago, with the acquisition of Satyam in April 2009.
The Indian IT company in turn will host the cloud and mobile-based services in Singapore and Malaysia, while providing direct sales and IT services to clients throughout Association of Southeast Asian Nations region.
The Mumbai-headquartered company now has an employee strength of 84,000 serving 540 clients across 46 countries. Its revenues are at $2:7 billion.
Speaking to reporters after the board meeting of Mahindra Satyam in New Delhi, Tech Mahindra CEO Vineet Nayyar said, "It (restatement of accounts of Mahindra Satyam) is likely to be completed by the end of the year (2009)".
The boards of Mahindra Satyam and Tech Mahindra last year proposed a swap ratio of 2:17. Mahindra Satyam shareholders will get two shares of Tech Mahindra of Rs 10 each for every 17 shares they hold.
Steady performance of Mahindra Satyam and increasing traction in non-BT revenues are key positives for Tech Mahindra.
Mahindra Satyam and Tech Mahindra together have Global Delivery Centres in Shanghai and Nanjing.
In a BSE filing, the company said it has filed certified copies of the Andhra Pradesh High Court order paving way for the merger with Registrar of Companies, Andhra Pradesh, Hyderabad.
Satyam Computer, which has been acquired by Tech Mahindra and rebranded as Mahindra Satyam, is likely to get a new chief financial officer (CFO) by the first week of July.
'One year on, it's worked reasonably well. It's been a rewarding journey but the journey has no finish line.'
In just two years after taking over Mahindra Satyam (the brand identity of Hyderabad-based information technology outsourcing company Satyam Computer Services), its parent company Tech Mahindra is looking at inorganic growth to take Satyam, which it had nursed back to health, to do a marathon.
Gurnani succeeds A S Murthy who was appointed by the government board after the multi-crore rupee scam broke out in then Satyam Computer Services. Gurnani has been heading the global operations of Tech Mahindra.
This strategic move paves the way for the emergence of a robust brand, which draws from the core values of the Mahindra Group and the inherent strength of the Satyam brand. The logo will be adopted from the Mahindra Group, an official press note of the company said.
Mahindra Satyam will be able to keep its revenue in the range of $900 million to $1.1 billion, says a study by Forrester, an IT research firm. However, the report stated that clients are still unclear about what is happening in the company.
Tech Mahindra considered a couple of options -- keep the Satyam name or replace it entirely. But research said Satyam still reflected critical strengths that were recognised and valued by customers. "By combining it with the well-known and highly-regarded Mahindra name, we are able to convey a stronger message more credibly: that Mahindra Satyam has the resources, talent and resolve to ensure a steady performance," says T Hari, its the marketing and communications head.
For the first time in almost six months after it was acquired by Tech Mahindra, Satyam Computer Services (now rebranded as Mahindra Satyam) will hire 130 people from outside the company.
Board, audit panel to meet on September 4.
Back on track under the new management of Tech Mahindra, Mahindra Satyam (the new identity of information technology outsourcing company Satyam Computer Services Limited) is bullish on joining the league of its peers through its predefined three-year turnaround plan.
Mahindra Satyam, the rebranded Satyam Computer Services, is set to position itself as an information and communication technologies (ICT) company.
Union of scam-tainted Satyam and telecom-focused Tech Mahindra has produced a fitter company.
Earlier, the Scheme of Amalgamation and Arrangement was approved by the High Courts of Andhra Pradesh and Mumbai. The company then had launched Tech Mahindra as the brand identity of the merged entity.
The Board of Mahindra Satyam will meet on July 10 to clear the proposal of Tech Mahindra seeking a second round of preferential share allotment to hike its stake in the newly acquired company to about 43 per cent after an open offer evoked a weak response.
Last year, Tech Mahindra and Mahindra Satyam announced their intention to merge aming to create a $2.4 billion entity.
According to a department notification, Tech Mahindra has approached the Board of Approvals under the Department of Commerce for transferring rights of three SEZs (one in Tamil Nadu and two in Andhra Pradesh) and the proposal will come up for a discussion before the BoA on August 30.
While the company will gain from enhanced scale and size following the merger with Mahindra Satyam, its ability to bag large deals will be a key growth driver.
The company has put in place a new team to scout for opportunities in new verticals and geographies in order to double revenue in two years.
There were speculations that BT may exit in view of likely merger of Mahindra Satyam and Tech Mahindra.
Private equity (PE) players and investment bankers are divided over the timing of the BT Group's reported move to exit Tech Mahindra. BT owns about 30 per cent in TechM.
National Australia Bank is one of the key customers Tech Mahindra executive vice-chairman Vineet Nayyar will be meeting next week. Nayyar will be in town to spread Satyam's new identity after it was renamed Mahindra Satyam, and try to regain its standing with the NAB and clients such as Qantas and Suncorp. Satyam continues to provide application development and IT maintenance services to the NAB.
After announcing the second quarter results, Chairman Vineet Nayyar, Chief Executive C P Gurnani and Chief Financial Officer Vasant Krishnan share their views.
'We wrote to the bank a few weeks ago. We don't expect an immediate response as these things take time but we disagree with the claims they've made,' Australian IT quoted Tech Mahindra executive vice-chairman Vineet Nayyar as saying in Sydney. Satyam was blacklisted last September and a month later was forced to deny reports that its contractors had installed spy software on World Bank computers.
Market looks at a share swap ratio of 1:8
Later Mahindra Satyam said its board of directors has allotted 19.86 crore additional shares to Venturebay, which would take Tech Mahindra's stake to approximately 43 per cent of the outstanding share capital. A Tech Mahindra spokesperson said after the preferential allotment Venturebay's stake in Mahindra Satyam would be 42.7 per cent.
Now sole contender as L&T Infotech quits race
After taking over scam-hit Satyam, Techn Mahindra has made many structural changes in the latter to turn it around.
Mahindra Satyam's Gurnani to be CEO after Tech M integration.
Satyam's employees had to undergo mental trauma, job uncertainty and financial problems, after many were forced to leave.
IT services firm Tech Mahindra on Thursday posted a 57.6 per cent growth in consolidated net profit at Rs 718.4 crore (Rs 7.18 billion) for the second quarter ended September 30, aided by growth across verticals especially retail, travel and logistics and uptick in demand from Europe.
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