PEs approach top guns for Satyam stake buy

BANGALORE: Investment bankers acting on the behalf of private equity (PE) investors have approached several top IT honchos to lead a possible ���management buy in��� at the beleaguered $2-billion IT services major Satyam Computer Services.

Big buyout funds such as KKR, Carlyle, Silver Lake, Apax and TPG have become active since Satyam appointed DSP Merrill Lynch to explore strategic options. Meanwhile, the promoters themselves are attempting to revamp the top management in a bid to turn around the company���s battered image.

An investment banker, who shortlisted 15-20 top executives to lead a management buy in, said that a deal backed by private equity was a distinct possibility and ���need not be construed as hostile to existing promoters.��� One investment banker, on condition of anonymity, said he was aware of overtures made to former and current honchos at Wipro and Infosys. Some well-known sectoral entrepreneurs outside India have also been reportedly contacted and better clarity would emerge after their return from the Christmas-New Year break.



���We are looking at CEOs who can sew up a team and are talking to those who have joined mid-tier companies or turned entrepreneurs to build businesses,��� a banking source said.

This could see some mid-tier Indian companies being pulled into a strategic deal. Only an interest in Satyam could catapult them into the big league, a sectoral analyst explained.

However, if investment bankers are to be believed, the possibility of a management buy-in backed by a financial investor is gaining traction. Rajus, who are under pressure to yield control to an independent board, may be more amenable to this possibility rather than giving in to a tech rival through a strategic deal. It must be mentioned that PE funds such as TPG and KKR have former IT honchos on board, either as partners or CEOs of portfolio companies.

TPG Capital���s partner Vivek Paul was a former CEO at Wipro, while KKR���s portfolio investment Aricent Technologies is led by Wipro���s one-time M&A head Sudip Nandy. And both these funds have been open to big-ticket consolidation in the IT sector, even though their interest in Satyam is still a matter of speculation. Big MNC tech firms may not jump into the M&A ring, even while an offshore acquisition makes sense in these tough times. ���With a new issue cropping up everyday, there���s lack of clarity and it is better to first let the dust settle,��� a senior MNC official said.