LogicaCMG plans acquisition spree

Aiming to become one of the top 10 IT services companies in the world by revenue over the next five years, LogicaCMG PLC is planning acquisitions worldwide, including one in India, according to a company executive.

“Our acquisition strategy is based on acquiring companies which can either improve our critical mass in a particular geography or strengthen our offerings in a key market or technology,” said Seamus Keating, group finance director of LogicaCMG.

London-based LogicaCMG provides management and IT consulting, systems integration and outsourcing services across diverse markets including telecommunications, energy and utilities and financial services. The company was formed in December 2002 by the merger of Logica PLC and CMG PLC in London.

LogicaCMG is scouting India for a software development organization with a staff of approximately 500 people, probably in the financial services or telecommunications software sector, according to Keating. Although the company has kept open the option to acquire a business either outright in cash or by a stock swap, it is more likely to use stock swaps to maximize its appreciating stock value, Keating added.

LogicaCMG is also planning to acquire companies in the U.S. and other countries. “We would look to expand in key geographies and to build on our sector expertise,” said Keating. “Obviously to achieve our ambition of a top 10 position, we will have to be larger in the U.S. market for example.”

LogicaCMG already has a software development center in Bangalore, India. Last September the company announced plans to increase the office’s staff from 400 people to approximately 1,500 over an 18 month period, as its customers showed interest in Indian offshore development. LogicaCMG’s Bangalore staff currently handles information technology services, product development and man a technical support desk for customers. The center is also developing products for the financial services, mobile telecommunications and energy and utilities markets.