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Over the years, IT outsourcing Satyam (NYSE: SAY) became a symbol of the innovation and growth of India. Unfortunately, with the uncovering of the billion-dollar accounting scandal, the name is now in tatters.
However, Satyam has done an impressive job in taking action to deal with the crisis. For example, the company brought in A.S. Murthy as the CEO -- a 15-year veteran of Satyam -- who has lots of credibility. At the same time, the company has also appointed Homi Khusrokhan, the former Managing Director of Tata Chemicals, and Partho Datta, the former Finance Director of the Murugappa Group as special advisors. Boston Consulting Group will also provide much-needed assistance-for free.
In fact, Satyam was able to raise $130 million in financing.
Despite all this, it's still going to be tough to remain an independent company. As a result, Satyam retained Goldman Sachs (NYSE: GS) and Avendus as investment bankers, who will explore so-called "strategic options." This is a fancy way of saying that the company wants to find a buyer.
Actually, Satyam has already gotten some buyout feelers, from corporate entities and private equity funds.
So, is there opportunity for investors? Perhaps not. For the most part, a deal could take a while because of the complexities of the situation with Satyam being a government-administered company. Also, Satyam may show deterioration of its business as rivals poach customers, or as prospective customers may go elsewhere. No doubt, such factors will put pressure on Satyam's valuation.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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