Tata Buys Alti And Focuses On European Growth
India-based Tata Consultancy Services (TCS) has agreed to buy French IT services company Alti SA , for EUR75mn. The all-cash purchase is expected to strengthen TCS' footprint and service delivery capabilities in France and other key European markets. The purchase plays into BMI 's view that the French IT services market will return to positive growth soon and consolidation in Western European markets will improve the sustainability of IT service revenue generation in the medium - to long term.
Privately-owned Alti is focused on the provision of enterprise solutions, assurance and customer relationship management (CRM) solutions across a wide range of industry verticals (banking, financial services, luxury, manufacturing and utilities) in multiple European markets. The company is regarded as one of the top five system integrators for enterprise solutions in France. Revenues have grown from EUR64mn in 2007 to EUR126mn in 2012, according to TCS and it has 1,200 employees in France, Belgium and Switzerland.
TCS has been active in France since 1992, has grown organically through local hiring and strategic investments , and currently serves more than 50 large clients. However, with a number of high-profile French and multinational IT service providers having bolstered their domestic and continental European businesses through mergers and acquisitions during 2011/12, TCS risked being left behind. To an extent, this is reflected by the group's financial results for the quarter ended December 2012, which showed that continental European operations accounted for just 9.1% of consolidated revenues, down by 2.4% q-o-q and up by just 5.2% y-o-y. By comparison, the UK - TCS' largest European market - accounted for 17.5% of revenues, up by 5.2% q-o-q and by 41.6% y-o-y.
|BMI Foresees IT Services Growth Rebound|
|France: IT Service Market Forecasts, 2010-2017|