Bearingpoint is an amazing opportunity, who will grab it?

By Ashish Jhajharia, March 1, 2009 10:42 PM

NASDAQ listed “Bearingpoint” or  was formerly known as KPMG Consulting has some 12500 people across 65 countries and with revenue of more than $ 4 bn (avg revenue per employee is $3,20,000 much above the industry avg, more than twice above world’s IT big 5 & 8-10 times of avg revenue per employee of India’s IT big 5).  

It has some 500 people in India, 1000 in china, 2000 in Japan, 5000 in US and rest of them in
Europe & elsewhere. 

 Most of their revenue comes from Govt, defense, public sector, EUT, healthcare & financial services sector, and also SAP consulting revenue is almost 20% in this. They are doing good amount of work in Iraq &
Afghanistan too. 

BearingPoint’s shares were trading at 22 cents and the company had a market cap of $49.9 million. It has about $ 1 bn of debts (incl.690 million worth of convertible debt) on its books. 

I couldn’t find any data about the order book of Bearingpoint (looking at revenue I hope the deal pipeline should be very healthy). 

Isn’t it a good option than Satyam, Atos, and Cap Gemini for a possible takeover or merger?  Definitely it’s a golden opportunity for organizations sitting on huge cash pile or backed by PE investors. 

Especially keeping this in mind that it has very high onshore presence and does niche consulting work. It has good presence in Continental Europe, Japan, and China and of course
USA. Most of its revenue comes from evergreen Govt., Defense and Public Sector Consulting. 

Any company buying out or merging with Bearingpoint with definitely have edge in both short long term. 

Companies like Atos, Cap Gemini, Logica, Accenture, HP, IBM has lots of synergies in common with Bearingpoint and will have fewer problems in integrating Bearingpoint with it. 

On the contrary it offers a never before opportunity of getting into high end consulting area to companies like HCL, Infosys, Wipro, TCS, Cognizant etc. 

I believe a possible move and successful takeover of Bearingpoint by any of these companies will definitely enhance the shareholders value, client’s confidence and employee morale on both the sides.

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