M &A in IT Consulting Industry

In Tier 2 IT Consulting space, To get aquired seem to be the order of the day. Recently, CapGemini aquired Kanbay.

Here is how it is summed up.

• Deal is 29$ per share, it is a premium over trading price.
• Kanbay operates in three cities in India - Pune, Hyderabad, Chennai. CapGemini operates from Mumbai, Bangalore and Kolkata (Calcutta). Which means with this aquisition, CapGemini doubled number of sites in India. A smart move.
• Allows CapGemini to reach 12000 headcount in India.
• Allows CapGemini to consolidate in Financial Services Industry.

What is Kanbay anyway? Here is some dope.

• Kanbay name is based on Canada and Bombay, two of the founders came from these two places. Interestingly enough, Kanbay does not have a presense in this two places.
• In 2005, Kanbay acquired Accurum - a IT service provider in Capital Market segment.
• In 2006, Kanbay acquired Adjoined Consulting, a tier 3 IT Services company.
• At the end, it gets aquired by CapGemini, a tier 1 IT Services company.