Mahindra Satyam ‘looking to acquire’ in KSA
Services giant looks to possible acquisitions to build Saudi presence
Systems integrator and IT outsourcer Mahindra Satyam is looking to make acquisitions in the Middle East, most notably in Saudi Arabia, the company has confirmed.
In March, the Hyderabad, India-based vendor announced that it was planning on doubling its workforce in the region over the next two years as part of a $24 million (AED88 million) branding exercise.
Mahindra Satyam's Middle East operation, which is based in Dubai, currently employs about 300 staff , as well as an extra 400 or so that work on-site at regional customers' offices.
According to the company's vice president of Middle East, Bobby Gupta, Mahindra Satyam's attempts at strengthening its market position in the region could involve an acquisition. "We're either looking for [partnerships] or to acquire a company. We don't mind if we have a strategic vendor-vendor relationship, or if we acquire a company in the Middle East." When asked if Mahindra Satyam was seeking to acquire, Gupta confirmed: "That's what we want to do, absolutely."
Mahindra Satyam is particularly keen on signing up more customers in Saudi Arabia's lucrative oil and energy sector, which Gupta says remains largely untapped. "Saudi specifically is a huge market, and right now we're not tapping the potential," he explains.
"Saudi is like a sleeping giant - it's a huge market. I'd say Saudi is like China was 20 years back. The population is great, there are huge natural resources, and an abundance of money in the bank. But because of the challenges, you've got to look at a local partner to do anything there. So we're looking at investing in partners, even if that means buying a company in Saudi Arabia as a local platform to move forward," Gupta adds.
So far this year, Mahindra Satyam has signed several high-value IT deals in the Middle East, including a multi-million dollar contract with AspireZone, a leading sporting institute in Qatar.
The Mahindra group, which includes fellow outsourcer Tech Mahindra, was one of the first of India's major IT providers to focus on the Middle Eastern market, which it entered in 1999. The vendor mostly provides enterprise business solutions, such as software lifecycle management for SAP and Oracle, to verticals including public sector, finance, construction and utilities.
However, Mahindra Satyam has also faced difficulties in recent times. In 2009, the company, in its former guise of Satyam Computers, went into meltdown after founder and CEO Rama Raju was exposed for fraudulent accounting at the company.
In March 2011, an Indian court froze a number of bank accounts tied to the company, leading to fears over the financial stability of Mahindra Satyam. A few days later, the vendor was given back access to these accounts.