There are few important factors which stand out in the acquisition (almost down playing the importance of lower EBITDA margins) :
- Take has revenue breakup of US: 72% , AP : 21%, Europe:7%. Whereas EA has 50% of it's revenue coming from Europe. EA has a good base in Frankfurt. So in effect Take is expanding it's footprint into an important market through this acquisition.
- Take has audited data facility in Chennai and US and EA has an "audit ready" facility in Europe. So from that angle Take is gaining access to a important differentiator in this business.
- Getting right resources (especially on pharma side) is a challenge in this business and with this acquisition TAKE’s subject matter experts will increase by 30% and its life sciences workforce will increase by 50%. So mgmt. sees it as a big positive.
- There is only a 20% overlap in the clients of TAKE and EA. EA has several marquee (like Roche, Fresenius, Danone,Bayer, Piramal, Dr. Reddy, Biocon). So Take sees significant opportunities to cross-sell and up-sell.
- Also, Take mgmt. thinks EA's technology usage is on lower side and gives a lever to increase margins by use of higher automation.
- EA seems to be a CRO (Clinical Research Organization) which in turn uses services of clinical data mgmt player (previously infosys ? or may be multiple players). So in that sense there is hardly any conflict in terms opportunities to cross-sell and up-sell.
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