Indian IT Enabled Service Companies Major Players in U.S. Acquisitions

According to recent reports, Indian companies have gobbled up a whopping 143 acquisitins in the U.S. in just two years. These takeovers were reportedly iacross several sectors. At any rate these firms managed to bail out several firms that were on the brink of brankcruptcy during the climax of the credit crunch.

Incidentallly, the Indian companies also created about 300,000 jobs in the process, according to a study reported in the Offshoring Times. In just the last fiscal year, there were 94 deals ranging from $0.8 million to $1,005 million were completed. The disclosed value of 55 deals amounted to $,432 million, said a joint study by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Emst and Young.

In the fiscal year 2008-2009, Indian firms were linked to 49 U.S. based acquisitions. Of these, 24 disclosed cases revealed a value of $960 million. The deals ranged from $0.70 millionto $172 million, said the study.

Meera Shankar, Indian Ambassador to the U.S. was quoted as saying, "India Contributes to Employment, Capital Growth and Tax Revenues in the US - Direct Investment by Indian companies in 2007-2009," reports Offshoring Times. She also indicated that Indo-U.S. bilateral relationship has witnesses a significant change recently. She continued to note that there was strong convergences in the relationship between the two countries.

According to the study, IT and ITes (referring to Information Technology and Information Technology Enabled Services like offshore outsourcing), pharmaceutical, consumer products and manufacturing were the key industries where there were outbound acquisitions in the U.S. And the study also found that the IT and ITeS industry was where most of the acquisitins occurred. In fact, the IT & ITeS sector amounted to half of the total number of purchasing deals in 2007-2008. In additin, that figure was 40% in 2008-2009.

The report suggested that this increase in Indian outbound investment, particularly in the IT enabled service firms that are involved in offshore outsourcing to the U.S. , was due to robust economic growth and easy debt financing for firms. Despite an impending recession in the U.S., many Indian multinational companies are eager to get hold of U.S. fimrs. Nonethless, the economic downturn has resulted in higher costs for acquisitions overseas.