The purchase agreement consists of $23.2m payable over a three-year period with an additional performance based payment of up to $15.5m, again to be paid over three years.
It is thought that Citisoft will operate as a subsidiary of Satyam in its Financial Services Group (FSG).
According to Satyam, IT spending in the investment management industry made up 10% of the total $71bn spending costs of the securities industry as a whole in 2004. Satyam’s acquisition of Citisoft comes as this figure looks set to increase for the next four years, which is encouraging some firms to outsource in the hope of increasing operational efficiencies from their front to back office operations.
One of the apparent catalysts in the transaction was Bear Stearns & Co, an investment banking, securities trading and brokerage firm. Steve Buckridge, chief development officer for the company, said: We introduced the two organizations to each other as we see immense value in the combined synergy that the two organizations will provide to leading global asset management firms like Bear Stearns.
The completion of the transaction is reported to be expected by end of April 2005.
