PERCENTIX BLOG

The Percentix/Prithvi EPM Consulting Acquisition

As most of you know, Percentix, Inc. was acquired by Prithvi Information Solutions, Inc. in mid-October of this year (visit http://www.percentix.com/ for more information on the acquisition).  Today I would like to answer a few questions surrounding the nature of the deal and what it means for our clients and the marketplace in general.

Q: Why did you decide that an acquisition strategy was in the best interest of Percentix's clients and employees?

A: There is no question that the nature of the deal was strategic.  I believe that there are three primary strategic reasons for the deal.  Firstly, Percentix was seeking to partner with a larger company that would provide a platform for solid, consistent growth.  We talked with many prospective business partners but found Prithvi Information Solutions to be the best balance between the inherent benefits of a large, multinational, publicly traded company and a culture of entrepreneurship.  Percentix has always been extremely entrepreneurial, particularly when compared to its competitors.  Looking at our historical revenue mix, we have traditionally secured new business via competing in very difficult RFP processes against much larger companies, and did not rely on an approach that was solely "relationship based".  Instead, we took a "value based" approach.  I think the Percentix way is simple: we are smart, we are motivated, we know how to innovate, and we can win - irrespective of the competitive landscape.  Maintaining this entrepreneurial culture is critical to our long term success, as are the traits a large company brings.

Secondly, Percentix is a company of bold, innovative ideas, ideas that can become a reality with the assistance and expertise of a larger company such as Prithvi.  I've been involved with EPM for nearly a decade, and over those years, and countless implementations, I truly believe that the nature of EPM consulting is headed for a major set of changes, changes that few firms are willing or able to face.  The combined Prithvi/Percentix entity will have the expertise and the value chain necessary to set the newest trends in our industry.  We are extremely excited about this.

Lastly, our clients will be much better served as a result of this transaction.  Specifically, we now have the ability to establish a company-wide relationship with our clients, fueled by the deep IT service offerings that Prithvi brings to the table.  Clearly, as a standalone company, Percentix offered world class EPM consulting capabilities, however, we did not have the ability to respond to many of the other more traditional IT requests that we see on a daily basis.  Now, as a combined entity, we can provide services ranging from ERP implementations to business intelligence to establishing a global data center.  Most large IT organizations have a difficult time providing EPM expertise because they view this area as "too small".  Prithvi Percentix offers the best of both worlds: world class EPM services and world class IT services. 

Q: Can you describe the acquiring company?

A: The following information is provided in a press release. 

Prithvi is a global provider of IT Consulting and Engineering solutions. Prithvi's decade of experience helps it to continually innovate and address latest imperatives in IT industry. Our operations began in the year 1998 with our registered office in Hyderabad, India and US head office located in Pittsburgh (PA). Prithvi's global network of development centers and sales offices are in Europe, Middle East and Asia Pacific. Prithvi operates under five strategic business units jointly addressing a wide spectrum of client needs. Our solutions are particularly advanced and powerful for these vertical markets: Healthcare, Retail, BFSI and Telecom. With services that range from consulting to comprehensive project implementation, our industry specialists understand business and will help incorporate them quickly and effectively. We strive to achieve best quality of service by constantly examining and measuring the processes by which we deliver our solutions. For more information, visit us at http://www.prithvisolutions.com/.

Q: What changes will we see at Percentix due to the acquisition?

A: Percentix will operate as a wholly owned subsidiary of Prithvi.  As such, the changes on a day to day basis are minimal.  Changes will be most visible to our clients and prospects as we offer full service IT capabilities and enjoy the backing of a publicly traded company.  Today, Percentix employees continue to serve in their pre-acquisition capacities and we have no plans to change that set of duties.  The Executive Management team remains in place.

Q: Were any employees laid off due to the acquisition?

A: No.  All employees remain and no changes have been made or are forecasted to be made.  In fact, we are interviewing extensively right now, looking for the right mix of business/technical skills within future consultants that match our needs.

Q: Was this acquisition in response to any negative changes such as the economy?

A: Absolutely not.  Our tenacity and ingenuity allowed us to really weather the downturn quite well.  Despite the relatively small size of our business development team, our pipeline of business is the largest in the history of the firm.  This deal was closed based on strategic factors.

Q: What new service offerings will be available to Percentix customers based on the acquisition?

A: Well, we will be able to offer a long list of new service offerings to customers based on the deep IT strength within Prithvi.  For more information on Prithvi's IT service offerings, please visit http://www.prithvisolutions.com/.  Moreover, Prithvi Percentix is developing entirely new lines of business that will leverage the synergies of the acquisition.  Subsequent white papers and blog articles will provide details as they become finalized.

Q: Why would such a large company want to buy a small-sized company?

A: To the consternation of some of our competitors, this deal does involve a $300+ million publicly traded company (Prithvi) acquiring a small private firm.  I say "consternation" because it really lends itself to the large customer value/brand that Percentix has been building over the years.  We deal with big projects at big companies, plain and simple.  Many of our engagements involved multi-million dollar budgets that spanned multiple years, and our relationships/references are maintained at the highest levels within our customer base.  Likewise, we operate with the entrepreneurial spirit of small firm combined with the business operations of a large company (CXO level).  We have behaved and operated as a much larger entity.  This is in contrast to our competition (of comparable size) which tends to operate as a set of subcontractors on retainer.  Such a business is established for short term profitability and refutes the idea of a creating a process-driven organization that derives fundamental value for clients over the lifetime of the relationship.  We have a 5 to 10 year business horizon, which may seem odd to most given our size, but we believe this permits us to provide the most value to our clients.  Frankly, the fact that such a large established company like Prithvi would acquire us is really a source of pride for me and my management team.  It validates our strategy and purpose.

Q: What synergies do you expect out of the deal?

A:  The synergies we will experience with our new parent lay primarily on the business development area, resulting in cross-selling opportunities that are sure to result in more growth than we could have ever managed on our own, and in new product/service development.

Q: Is there any overlap with the acquiring firm?

A: Other than back office functions, there is very little overlap between the two firms.  Prithvi was looking to establish a footprint in the EPM space and believes that our methods/processes offer them the best long term opportunity to do so. 

Q: What is the structure of the deal?

A: Percentix will operate as a wholly owned subsidiary of Prithvi.