NTT Data to buy Keane for $1.2 billion in U.S. push: report

TOKYO (BestGrowthStock) – Japanese IT services company NTT Data Corp will buy U.S. firm Keane Inc for more than 100 billion yen ($1.2 billion) as it looks to make a push into the world’s biggest IT market, the Nikkei business daily said on Thursday.

NTT Data has been buying up IT firms around the globe in the past five years or so, and the acquisition of Boston-based Keane would mark its biggest deal and the latest example of a Japanese company capitalizing on the yen’s strength to snap up assets overseas.

Shares of NTT Data, 54 percent-owned by Japan’s biggest phone company NTT, were up 1.1 percent, outperforming the market.

The two companies are in the final stages of negotiations to reach an agreement by the end of the month that will allow NTT Data to access Keane’s blue-chip clients in the United States as well as research and development bases in India and elsewhere, the paper said.

NTT Data said in a statement it had not provided the information cited in the report.

“NTT Data has been explicit about its plans to expand globally through M&As, and if the report is true it would be a positive move since it shows the company is acting out its strategies,” Mitsubishi UFJ Morgan Stanley senior analyst Hideaki Tanaka said.

“With the growth potential of Japan’s economy being limited, Japanese companies have been expanding overseas and there has been increasing demand from them for Japanese system integrators to take care of their needs outside of the home country as well.”

NTT Data, which aims to lift its overseas sales to 300 billion yen by the business year starting in April 2012 from roughly 70 billion yen in the year ended in March, plans to purchase all outstanding shares of Keane, the Nikkei said.

A Citigroup Inc investment unit currently owns roughly half of Keane, while Keane’s employees own the rest of the firm, the Nikkei said. Keane, a 45-year-old unlisted firm, generated about $790 million in sales last year and has 12,000 employees, the paper said.

The yen’s rise to a 15-year high against the dollar has helped reignite a push by Japanese companies to acquire assets abroad to secure growth outside their sluggish home market.

The value of outbound acquisitions by Japanese companies has exceeded $32.3 billion so far this year, according to Thomson Reuters data. That is a big jump from $14.4 billion in the same period last year and $19.4 billion for all of 2009.

NTT Data has made at least 17 acquisitions overseas since 2005, including seven just this year, a company spokesman said. It bought New Jersey-based Intelligroup Inc earlier this year in a $199 million deal.

NTT Data’s parent firm recently took over South Africa’s Dimension Data.

Shares of NTT Data were up 1.1 percent at 249,700 yen after gaining as much as 3.3 percent in early trade. The benchmark Nikkei average rose 0.2 percent.

(Reporting by Sachi Izumi and James Topham in TOKYO and Isheeta Sanghi in BANGALORE; Editing by Joseph Radford and Chris Gallagher)

NTT Data to buy Keane for $1.2 billion in U.S. push: report