Indian services giant Satyam Computer Services has followed disappointing financial results with the announcement of two prominent acquisitions. Satyam has acquired Caterpillar’s MR&CA intellectual property and assets for $60 million. Satyam will also launch a business unit to provide MR&CA solutions and services globally to Caterpillar and to its other customers in various industries.

The acquisition will strengthen Satyam’s relationship with Caterpillar. Satyam will now support Caterpillar in segmentation, promotions, forecasting, new product development, service, validation, and customer survey execution, among other areas.

“We were honored to be named one of Caterpillar’s few strategic partners in 2005, and this acquisition further demonstrates the trust both organizations have in each other,” said Satyam chairman B. Ramalinga Raju. “It also accelerates development of our business transformation capabilities and further enhances our end-to-end business solutions, from strategy on through to BPO [business process outsourcing]. It is a significant step in our march toward becoming true business transformation partners with our customers.”

Caterpillar’s MR&CA IP and assets will complement Satyam’s business consulting capabilities, industry knowledge, and market research processes, says Satyam, enabling it to establish itself at the forefront of a substantial knowledge process outsourcing (KPO) market.

According to a NASSCOM study, the KPO industry worldwide will reach $17 billion by 2010, with India accounting for about $12 billion of that total. Market research and analytics – tools and processes inherent in organisations’ strategic planning – will constitute about 25 percent of that sum. Satyam is well positioned, thanks to the acquisition, to offer these strategic services to the greater marketplace.

To accommodate Caterpillar’s MR&CA requirements, as well as those of other organisations, Satyam will launch innovation centers in India, Europe, North America, Latin America and Asia Pacific. It currently operates centres in the US, Canada, Brazil, the UK, Hungary, Egypt, UAE, India, China, Malaysia, Singapore, and Australia.

Satyam has also announced the acquisition of S&V Management Consultants, the Ghent, Belgium-based supply chain management (SCM) consulting firm. The $35.5 million, all-cash purchase reinforces Satyam’s supply chain strategy capabilities. “We are excited to acquire an established SCM firm that is respected for its innovative, high-quality, and high-end supply chain strategy services,” said Satyam chairman B. Ramalinga Raju. “S&V’s entire team is renowned for its exceptional capabilities and we look forward to having our customers to benefit from that expertise.”

S&V was founded in 1992, and has offices in Belgium and the Netherlands. The $15 million firm develops supply chain strategy and performance, and supply chain process excellence solutions, largely for manufacturing and pharmaceutical companies and public entities. S&V features 60 consultants, all of whom are Six Sigma-trained and APICS-certified, and fluent in English, Dutch, and French.

As a part of this transaction, Satyam also acquires business decision support software Equazion, a supply chain performance management suite.

“We are pleased to become part of the Satyam family, and to leverage its world-class business process and technology skills, global resources, and relationships with high-profile customers,” said S&V co-founder and partner Peter Verstraeten. “At the same time, we look forward to making our expertise and assets, including our robust software, available to our new colleagues and their customers.”

Several factors make the agreement ideal for Satyam, said Raju. Acquisitions work best when the absorbing organization gains leadership capabilities, customer relationships, higher value services, brand enhancement, and new competencies.

S&V will operate as a fully owned subsidiary of Satyam for the near future, maintaining its name and brand. However, it will become a part of Satyam’s Consulting and Enterprise Solutions team.

• Satyam does not appear in this year's Global Outsourcing 100, published by the International Association of Outsourcing Professionals.