Satyam eyes strategic deals worth $100 mn

Satyam Computer Services will be targeting two-three deals of $100 million and above in the next 6-12 months, for which it has formed a strategic deals group to help it close these large deals.

It plans to crack open the European market with these deals and is in negotiations with companies in the banking, financial services and insurance (BFSI) and healthcare sectors.

Addressing the media, Hetzel W Folden, head, strategic deals group, Satyam Computer Services, said: "As a company, Satyam will now focus on deals that are worth $100 million and more. We are in negotiations with organisations like Pfizer, World Bank and GlaxoSmithKline. In the next 6-12 months, we will finalise two-three deals of this order."

The company expects such strategic deals to account for 10 per cent of annual revenues by next year. Folden also said the company was also reviewing proposals that have the potential to throw up big-ticket deals.

"We are eyeing the European market as it has potential for explosive growth ," he added. Satyam is also open to strategic tieups with companies for projects that it cannot bag on its own.

"For projects that are $3-4 billion and above, we cannot compete on our own. Multiple-sourcing contracts, akin to the ABN Amro deal, will be required in such cases," he said.

Folden said that small deals would continue to be part of their portfolio as these deals had higher margins when compared to large deals. "In large deals, the margins dip by as much as 50%, as compared to smaller deals. So, we will have to continue with the traditional deal sizes as well," he added.

Commenting on the outsourcing scenario in India, Folden said that he does not see the bubble bursting as yet. "India is here to stay as the skills and abilities of Indian firms continue to be highlighted," he added.

Folden joined Satyam from Computer Sciences Corporation where he was a part of the strategic deals team and played the role of a lead negotiator in closing deals worth over $3 billion over the last few years. The deals were in the areas of applications outsourcing and infrastructure outsourcing.

ON THE HUNT

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• The company plans to target Europe for large deals
• It is in talks with Pfizer, World Bank and GlaxoSmithKline
• Satyam would team up with MNCs for projects that it cannot bag on its own
• It expects these deals to contribute 10 per cent to its revenues next year