Loaded with huge amount of cash, Satyam Computer today said it has accelerated the hunt for prospective companies that it could acquire globally even if the cost runs into billions of dollars.
Sensing opportunities arising out of the financial crisis triggered by fall of major banks and mortgage giants in the US, Satyam's founder and Chairman B Ramalinga Raju told PTI in an interview that it is possible to raise $ 4-5 billion as war-chest for acquisitions that strategically fit India's fourth largest IT entity.
Raju said the company had a billion-dollar cash surplus and funds were not any issue when any potential acquisition opportunities came around. "The acquisition could be even in billions of dollars".
Asked if its next bid could be a billion-dollar deal as it could easily muster around Rs 15,000-20,000 crore by leveraging its Rs 4,000-crore cash pile, Raju said, "That is a possibility".
On whether it has asked its advisors and bankers to hunt for potential targets given cheaper acquisition opportunities in the backdrop of falling market valuations across the world markets, he said, "We have accelerated the process... The valuations have become more attractive than what they used to be".
Loaded with reserves and surplus of over Rs 7,000 crore at the end of last fiscal, the company's guidance (target) is to reach about Rs 11,000 crore ($2.6-2.7 billion) of revenue in the current fiscal. It had recently acquired an entity for $280 million.
Satyam's revenue grew to $2.14 billion in the latest fiscal FY08, up from $1.46 billion in FY07.
Noting that acquisitions were an integral part of its growth strategy and would continue to remain so, Raju said Satyam is not putting any boundaries in terms of size, geography or sector focus in its search for potential targets.
"When it comes to acquisitions, the operative word is synergy and wherever we find significant synergies, we are open for acquisitions," he said, adding the option for the company was most likely to be buying in cash.
Asked if it would consider bidding for British consultancy firm Axon, for whose acquisition Indian firms HCL Technologies and Infosys are already in the race, Raju said, "When there are opportunities that are fairly significant in number, it is not necessarily healthy for too many companies to focus on a limited number of bids".
Axon's board has withdrawn its recommendation in respect to an earlier offer from Infosys, favouring a higher 441-million pound counter bid from HCL Technologies.
Raju noted, however, that "one of the things we are unlikely to do is just acquire for the reason for size if there is no synergy associated with the same.
"In today's economy, for us to accelerate the process of recruitment and enhancement of size is not going to be difficult. We already have reached a respectable size... Size is not any longer a limitation for us to be into access to better deals," he said.
Asked what were the major focus areas that Satyam would look to expand into through acquisitions, Raju said these included business intelligence, extended engineering areas, energy utilisation, sports and healthcare technologies.
In terms of geographies, Raju said the company was looking forward to focus on non-English speaking areas.
