VCCircle

There are two European IT services firms looking at acquisitions in India. Reuters reports that Capgemini, Europe's largest computer consultancy, is talking to several smaller Indian IT players for an acquisition. "India is very exciting. IT developments are national pride. I think that we are doing extremely well (there) but a consolidation would help us," Paul Hermelin, its Chief Executive, told the Reuters Global Technology, Media and Telecoms Summit in Paris. "We are talking with several Indian companies," he added.

Hermelin said that potential acquisition targets in India would mainly include IT services companies. But Capgemini could also buy business process outsourcing (BPO) companies, though not those which only had call centre operations. "We will look at non-voice BPOs," he said. They will basically look at tier two companies, and not the top tier ones like Infosys, Wipro and TCS (they are not for sale., anyway). Hermelin's targets could be smaller players which did not quite enjoy the same stock market multiples as Infosys and Wipro. (I-bankers, any ideas?).

In another related story, Cagemini's smaller rival, Atos Origin, said it was also looking to make acquisitions in India and planned to increase its staff there to 2,500 by the end of 2006 from 1,500 now.

Bernard Bourigeaud said, "I'm in discussions with some firms," he said. He hoped to clinch a deal "as quickly as we can". Bourigeaud said the companies he was looking at were in information technology, but that he was not discounting the possibility of buying an outsourcing firm.

However, Hermelin added that none of these companies was under pressure to do deals., so the conversation can take long.