Satyam Makes Acquisitions

April 23, 2008

Satyam Computer Services and Caterpillar have agreed to terms for the sale of Caterpillar’s Market Research and Customer Analytics (MR&CA) operations. The deal calls for Satyam to acquire Caterpillar’s MR&CA intellectual property and assets for $60 million. Satyam will also launch a business unit to provide MR&CA solutions and services globally to Caterpillar and to its other customers in various industries.

The acquisition will strengthen Satyam’s relationship with Caterpillar. Satyam will now support Caterpillar in segmentation, promotions, forecasting, new product development, service, validation, and customer survey execution, among other areas.

“We were honored to be named one of Caterpillar’s few strategic partners in 2005, and this acquisition further demonstrates the trust both organizations have in each other,” said Satyam Chairman B. Ramalinga Raju. “It also accelerates development of our business transformation capabilities and further enhances our end-to-end business solutions—from strategy on through to BPO. It is a significant step in our march toward becoming true business transformation partners with our customers.”

“We are pleased to expand our relationship with Caterpillar,” said Subu D., the director and senior vice president of Satyam’s Manufacturing and Automotive Group. “This acquisition provides us with a world-class platform to drive leadership and innovation in this space. Satyam will unlock the potential in the intellectual property and assets to offer high-end, differentiated MR&CA solutions and strategic services to Caterpillar and our other global customers.”

Caterpillar’s MR&CA IP and assets will complement Satyam’s business consulting capabilities, deep industry knowledge, and market research processes, enhancing Satyam’s offerings in these areas and enabling it to establish itself at the forefront of the substantial KPO market. According to a NASSCOM study, the KPO industry will reach US$17 billion by 2010, with India accounting for about $12 billion. Market research and analytics—tools and processes inherent in organizations’ strategic planning—will constitute about 25 percent of that sum. Satyam is well positioned, thanks to the acquisition, to offer these strategic services to the greater marketplace, a step in line with its objectives to transform its clients’ businesses.

To accommodate Caterpillar’s MR&CA requirements, as well as those of other organizations, Satyam will launch innovation centers in India, Europe, North America, Latin America and Asia Pacific. These facilities will enable Satyam to provide a full suite of innovative services—specifically, the gathering, storing, accessing, and analyzing of data—to global companies in manufacturing, financial services, healthcare, telecommunications, and other industries.

Also, Satyam has agreed to acquire S&V Management Consultants, a Ghent, Belgium-based supply chain management (SCM) consulting firm. The $35.5 million, all-cash purchase significantly reinforces Satyam’s supply chain strategy capabilities.

“We are excited to acquire an established SCM firm that is respected for its innovative, high-quality, and high-end supply chain strategy services,” said Satyam Chairman B. Ramalinga Raju. “S&V’s entire team is renowned for its exceptional capabilities and we look forward to having our customers to benefit from that expertise.”

S&V was founded in 1992, and has offices in Belgium and the Netherlands. The $15 million firm develops supply chain strategy and performance, and supply chain process excellence solutions, largely for manufacturing and pharmaceutical companies and public entities. S&V features 60 consultants, all of whom are Six Sigma-trained and APICS-certified, and fluent in English, Dutch, and French.

As a part of this transaction, Satyam also acquires an innovative business decision support software called Equazion, a sophisticated supply chain performance management suite that enables business decisions from a macro perspective.

“We are pleased to become part of the Satyam family, and to leverage its world-class business process and technology skills, global resources, and relationships with high-profile customers,” saidS&V Co-Founderand Partner Peter Verstraeten. “At the same time, we look forward to making our expertise and assets, including our robust software, available to our new colleagues and their customers.”

Several factors make the agreement ideal for Satyam, said Raju. Acquisitions work best when the absorbing organization gains leadership capabilities, customer relationships, higher value services, brand enhancement, and new competencies.
“The acquisition of S&V scores in all of the above areas,” Raju said. “With S&V’s experts as part of our team, Satyam will deliver superior, end-to-end transformational solutions with even greater speed and efficiency. As we deepen our relationships with longstanding customers, they expect us to provide highly strategic counsel. We are now more able to accommodate that demand.”

S&V leaders also look forward to working with their new colleagues to create more complete solutions.
“Joining with Satyam affords S&V numerous exciting opportunities to help a wide range of global customers with their supply chain challenges,” said S&V Co-Founder and Partner Steven Serneels. “Blending our consulting capabilities with Satyam’s world-class process and technology expertise will provide the best and most complete supply chain solutions.”

S&V will operate as a fully owned subsidiary of Satyam for the near future, maintaining its name and brand. However, it will become a part of Satyam’s Consulting and Enterprise Solutions team.