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Thursday, February 08, 2007

Caritor Folds Up Keane!!

Here comes the news, Keane getting acquired by Caritor, a company several times smaller. While news of caritor looking for acquistions and that Keane could get folded up was always there, the combination is indeed amazing. Keane has more than 10,000 employees, and Caritor, a 14-year-old firm, has more than 3,500.The combined company is expected to generate more than $1 billion in annual revenue in services.

This makes one prediction made last month come true :

9. Flush with cash/ access to cash, and spurred by constant pressure to grow faster, all firms irrespective of their tier status would announce overseas acquisitions in 2007. Global players shall increase their offshore sale aided by big ticket acquisitions.

Caritor claims that the resulting private company, with anticipated annual revenues over $1 billion and more than 14,000 professionals, is expected to be well positioned to deliver comprehensive IT and business process services to its clients, bringing together the strength of Keane’s IT delivery and client service capabilities with the flexibility of Caritor’s leading US-based global IT services business. Keane had its share of problems - Turmoil and turnover in the executive suite, coupled with a challenging restructuring that was taking time to materialize. It's sad to see a well known name like Keane fall like this. Almost 7/8 years back I have seen 200 mill dollar service companies talking internally about becoming as good as Keane. The talk of big ticket acquisitions has always been heard. We can see some more like this happening this year. Its in a way a clarion call to service companies – yesterday’s success is no guarantee to today’s survival/success. More on this at a later time.

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