In one of its very rare forays onto the M&A scene, Mumbai-headquartered TCS has acquired private equity-backed, French enterprise applications consultancy Alti for €75m cash. Alti turned over €126m in 2012, a price which suggests profitability was not brilliant (and in any event nowhere near TCS' own 27% EBIT margin). Alti has 1,000 employees in France and a further 200 across Belgium and Switzerland.
In terms of size, this is 'small change' for TCS, which turns over $11bn globally and employs over 260k people, the vast majority in India. But Alti looks like it will more than treble TCS's revenues in France, which were under €50m last year. TCS' last 'naked' acquisition (i.e. not associated with an outsourcing deal) in Europe – indeed its last anywhere – was that of its erstwhile Swiss partner Teknosoft back in 2006. Alti is only TCS' sixth acquisition since the beginning of the millennium, making it among the least 'adventurous' of the India-based players.
It's therefore hard to make too much of a song and dance about the deal. In any event, TCS has yet to prove that it can successfully integrate a 'foreign' culture via what appears to be a reverse take-over in one of the most vexatious country markets for India-based (actually, any non-French) players.
Update: We have since been advised that TCS acquired India-based high performance computing start-up Computational Research Laboratories (CRL) in August last year. However, CRL was already a wholly-owned subsidiary of TCS parent Tata Sons, so we rather view this more as a shuffling of the corporate portfolio than a 'true' acquisition.