TAKE SOLUTIONS LTD- will you take it?

There are few important factors which stand out in the acquisition (almost down playing the importance of lower EBITDA margins) :

1. 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.
2. 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.
3. 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.
4. 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.
5. Also, Take mgmt. thinks EA’s technology usage is on lower side and gives a lever to increase margins by use of higher automation.
6. 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.