§ Accelerates the pace for industry- wide transformation by targeting $1 Billion in operational efficiencies for the Global Investment Management Industry
§ Firmly positions Satyam as a significant global player in business and technology consulting services arena for the Investment Management Industry
Hyderabad (India), April 21, 2005: Satyam Computer Services Limited (NYSE: SAY), today announced the strategic acquisition of Citisoft, a highly specialized business and systems consulting firm that has focused exclusively on the Investment Management industry since 1986. With multi-national operating presence in London, Boston and New York, Citisoft has built an enviable reputation as a specialist investment management consulting firm with one of the largest concentration of business consulting expertise in the world. The consideration for the acquisition consists of a guaranteed payment of $23.2m payable over a 3-year period and an additional performance based payment of up to $15.5m, to be paid over a 3-year period.
Satyam is a Rs. 3521 crore global IT solutions provider with operations in 46 countries and over 20,000 employees, offering to the global market a comprehensive range of technology services ranging from application development and maintenance services to managed infrastructure services. Citisoft will operate as a subsidiary of Satyam and be a part of Satyam’s Financial Services Group (FSG) which has made significant progress and has been at the forefront of business transformation initiatives over the past two years across the entire value chain in the Securities and Capital Markets Industry ranging from the leading buy-side firms, sell-side firms, stock exchanges, settlement and clearing firms and market data and research firms. A few of FSG’s strategic clients were instrumental in introducing Citisoft to Satyam and recommending a strategic relationship between the two organizations with the clear anticipation that they would significantly benefit from the resulting synergy.
In the gamut of the Securities Industry, which had a total IT services spend of $71bn (according to Tower Group) world wide in 2004, approx 10% of this (=$7bn) comes from the Investment Management segment of the Industry which is a $35 Trillion market in itself. Reversing an earlier trend, technology spend in the Investment Management Industry is now beginning to outpace the rest of the Industry and is expected to maintain that momentum over the next four years. Industry trends in this sector are compelling a significant number of firms to outsource and thus increase operational efficiencies from their front to back office operations. Equally important has been the growing need for utilizing technology as an enabler for driving business transformation within this industry. Given the explicit need for very high levels of maturity in understanding this niche and complex market segment, prior to this acquisition, there was no single service provider that could meet the end-to-end business and technology needs of this industry.
"The acquisition is destined to enable Satyam to build a unique position and global footprint in the Financial Services sector and, we believe, the power of the brand, network and market experience will create precisely the mix we need. Both the companies share tremendous synergies in corporate values and client focus which will serve as a further springboard for enhancing our focus in business transformation", commented Mr. B Ramalinga Raju, Founder & Chairman – Satyam.
Commenting on the strategic acquisition Mr. Ram Mynampati, President, Commercial and Healthcare Businesses of Satyam said, "Our accelerated growth and prestigious client base within the securities industry demonstrate our ongoing commitment to enable industry-wide transformation in that Industry. With Citisoft’s world-class expertise and our global delivery capabilities, we are now in a position to effectively deliver a comprehensive and qualitative suite of solutions that will enable us to target for $1 Billion in cost savings through driving operational efficiencies over a five year period for this Industry."
Jonathan Clark, Founder and Executive Director of CITISOFT commented, "Our 1000 man years of deep investment management domain expertise, combined with the breadth and scale of Satyam’s truly global technology integration capabilities, makes this a truly landmark deal for the global securities industry and for our enhanced client base. We can now offer an unrivalled value proposition that covers everything from full-scale business transformation to back-office support at a great value. We are excited about becoming an integral part of Satyam and playing a key role in the industry’s evolution and establishing Satyam as a market leader in this industry. The successful closure of this acquisition represents new and exciting opportunities for our clients, our employees as well as for the future of the Industry."
Steve Buckridge, Chief Development Officer for Investment Banking and Asset Management, Bear Stearns & Co, said, "We have a very important partnership with Satyam and we greatly value the technology expertise that they bring to the table. We have high regards for the strong domain skills that CITISOFT has provided to Bear Stearns Asset Management and hence as a common client for both organizations, we introduced the two organizations to each other as we see immense value in the combined synergy that the two organizations will provide to leading global asset management firms like Bear Stearns. We look forward to taking advantage of this synergistic and integrated value proposition to accelerate Bear Stearns Asset Management’s speed to market".