Kanbay

Kanbay International, Inc. was an information-technology services and consulting company founded in 1989 by Raymond Spencer of Australia, John Patterson of Canada, and Dileep Nath of India. The founders had worked together at the Institute of Cultural Affairs, a nonprofit organization in Maharashtra, India, during the late 1980s. Kanbay was established with headquarters in the Chicago area and developed into a globally delivered technology-services provider with a particularly strong concentration in banking, insurance, lending, securities, payments, and other financial-services applications. The company’s service portfolio combined management consulting, technology integration, application development, systems implementation, maintenance, and outsourcing. Its delivery model relied heavily on international teams and Indian engineering centers. Kanbay described this network as GlobalLink, a structure intended to give clients access to distributed development and support resources. By the middle of the 2000s, its major clients included organizations such as Household International, HSBC Group, Morgan Stanley, CitiFinancial, Development Bank of Singapore, ABN AMRO, and Sun Life Financial. The company also served clients in consumer and industrial products and communications, although financial services remained its defining market. Kanbay attracted outside investment in September 1998, when Safeguard Scientifics acquired an interest equivalent to approximately 25 percent. It expanded internationally in 2000 through the purchase of Megatec, an Australian electronic-business products and solutions company based in Melbourne. Kanbay subsequently opened an office in Tokyo in 2001 and established a technology center in Pune, India, that same year. By 2004, it had regional offices in eight countries and delivery facilities in Pune and Hyderabad, in addition to its United States headquarters. It also held a 49 percent interest in SSS Holdings Corporation Limited in England. The company reached the public markets in July 2004, raising approximately $93 million in an initial public offering on NASDAQ under the symbol KBAY. Its growth strategy then included acquisitions intended to broaden both industry expertise and consulting capabilities. Accurum, a New York IT-services provider serving capital-markets clients, was acquired in early 2005. In early 2006, Kanbay acquired Adjoined Consulting, adding formal management-consulting and enterprise-resource-planning implementation capabilities. Kanbay’s growth was accompanied by significant customer concentration. HSBC Holdings and Morgan Stanley together represented roughly 60 percent of 2005 revenue, a factor relevant to understanding both the company’s financial-services specialization and its exposure to a small number of large accounts. The company reported revenue of $44.2 million in 1999 and $107.2 million in 2003, with 2003 net income of $11.4 million. Its workforce had reached approximately 6,900 associates by late 2006, with most employees located in India and roughly 5,000 to 7,000 staff engaged in software-development centers in Pune, Chennai, and Hyderabad. On October 27, 2006, Capgemini agreed to acquire Kanbay International for approximately $1.25 billion. The transaction was presented as a way for Capgemini to strengthen its presence in India and expand its financial-services delivery capabilities. After the transaction closed, Kanbay ceased to operate as an independent public company and its activities were incorporated into Capgemini’s financial-services organization. The former Kanbay business has been described as a Capgemini financial-services strategic or global business unit, rather than as a standalone brand.

Kanbay was established in 1989 by Raymond Spencer, John Patterson, and Dileep Nath. The founders had previously worked together at the Institute of Cultural Affairs in Maharashtra. Although Nath was Indian and the company developed a substantial Indian operating base, Kanbay was initially headquartered in the Chicago area, reflecting its international ownership and commercial orientation. The company developed a cross-border delivery model for technology consulting and software development. Its work covered management consulting, systems integration, application development, maintenance, and outsourcing. Financial services became the central industry focus, with projects involving banks, insurers, credit-card companies, lenders, securities firms, and payment systems. Kanbay’s GlobalLink model connected client work with resources in different countries, especially engineering and support personnel in India. Safeguard Scientifics acquired an interest of approximately 25 percent in September 1998. Kanbay expanded into Australia in October 2000 through the acquisition of Megatec, a Melbourne-based electronic-business products and solutions company. In 2001, it announced ISO 9001 certification, opened an office in Tokyo, and inaugurated a technology center in Pune. The company later operated delivery centers in Pune and Hyderabad and maintained regional offices across eight countries. It also held a minority interest in SSS Holdings Corporation Limited in England. Kanbay’s client base expanded during the early 2000s. By 2003, it counted major financial-services organizations among its customers, including Household International, HSBC Group, Morgan Stanley, CitiFinancial, Development Bank of Singapore, ABN AMRO, and Sun Life Financial. Reported revenue rose from $44.2 million in 1999 to $107.2 million in 2003, when the company reported net income of $11.4 million. The growth reflected demand for outsourced development and integration, but the business also had notable customer concentration: HSBC Holdings and Morgan Stanley together accounted for about 60 percent of 2005 revenue. Kanbay became publicly traded on NASDAQ in July 2004 under the symbol KBAY, raising approximately $93 million. It pursued acquisitions to broaden its capabilities. Accurum, a New York provider focused on capital-markets IT services, joined the company in early 2005. Adjoined Consulting was acquired in early 2006, strengthening Kanbay’s management-consulting and enterprise-resource-planning implementation offering. By late 2006, Kanbay had approximately 6,900 associates worldwide. Most employees were based in India, particularly in software-development centers in Pune, Chennai, and Hyderabad, while the company retained its United States headquarters in Rosemont, Illinois. On October 27, 2006, Capgemini announced an agreement to acquire Kanbay International for approximately $1.25 billion. The transaction was intended to increase Capgemini’s scale in India and reinforce its financial-services services business. Following completion, Kanbay no longer operated as an independent listed company and became part of Capgemini’s financial-services organization. The Kanbay business is now generally treated as a former Capgemini financial-services unit rather than an independent operating brand.

• 2006

  Adjoined Consulting acquisition

  [1]Kanbayen.wikipedia.org

  The purchase of Adjoined Consulting expands Kanbay’s management-consulting and ERP implementation capabilities.

• 2006

  Agreement to be acquired by Capgemini

  [1]Kanbayen.wikipedia.org

  Capgemini agrees to acquire Kanbay International for approximately $1.25 billion, ending Kanbay’s independent corporate trajectory.

• 2005

  Accurum acquisition

  [1]Kanbayen.wikipedia.org

  Kanbay acquires Accurum to add capital-markets technology expertise.

• 2004

  NASDAQ listing

  [1]Kanbayen.wikipedia.org

  Kanbay International becomes publicly traded on NASDAQ under the ticker KBAY and raises approximately $93 million.

• 2001

  Global delivery footprint expands

  [1]Kanbayen.wikipedia.org

  Kanbay announces ISO 9001 certification, opens a Tokyo office, and establishes a technology center in Pune, India.

• 2000

  Entry into Australia through Megatec acquisition

  [1]Kanbayen.wikipedia.org

  Kanbay expands into the Australian market by acquiring Melbourne-based Megatec.

• 1998

  Safeguard Scientifics takes an ownership interest

  [1]Kanbayen.wikipedia.org

  Safeguard Scientifics acquires an interest reported as approximately 25 percent of Kanbay.

• 1989

  Kanbay is founded

  [1]Kanbayen.wikipedia.org

  Raymond Spencer, John Patterson, and Dileep Nath establish Kanbay, with headquarters in the Chicago area and an international technology-services ambition.

A globally delivered IT consulting and systems-integration specialist serving banks, insurers, lenders, securities firms, and other financial-services organizations.

• Global delivery and outsourcing platform

  GlobalLink

  GlobalLink was Kanbay’s name for its distributed delivery network. It connected clients with technology-development and support resources across multiple countries, particularly Indian software-development centers. The model supported application development, systems integration, maintenance, and outsourcing work and was central to Kanbay’s ability to serve large financial-services organizations across geographies.

• IT consulting and systems integration

  Financial-services technology services

  Kanbay designed, implemented, and maintained software and technology environments for banks, insurers, lenders, securities firms, and payment organizations. Its work included banking and lending systems, credit-card and payment platforms, insurance applications, securities technology, application development, integration, and outsourcing. This financial-services specialization was the company’s principal market identity.

• Professional services · 2006

  Management consulting and ERP implementation

  Following its acquisition of Adjoined Consulting in 2006, Kanbay expanded beyond technology delivery into formal management consulting and enterprise-resource-planning implementation. The capability complemented its existing integration and application-development work by addressing business-process design, enterprise systems, and organizational transformation.

• 2006

  Acquire Adjoined ConsultingM&A

  Background

  Kanbay aimed to add higher-value consulting and enterprise-systems capabilities to its technology integration and outsourcing business.

  Action taken

  Kanbay acquired Adjoined Consulting, a professional-services firm with management-consulting and ERP implementation capabilities.

  Aftermath

  Kanbay’s service mix expanded toward business consulting and enterprise-resource-planning implementation shortly before its sale to Capgemini.

  Source

• 2006

  Accept Capgemini acquisitionM&A

  Background

  Capgemini wanted greater scale in India and a stronger financial-services delivery operation, while Kanbay had developed a substantial international client and employee base.

  Action taken

  Capgemini agreed to acquire Kanbay International for approximately $1.25 billion, subject to shareholder and regulatory approvals.

  Aftermath

  Kanbay ceased to be an independent public company and its operations were absorbed into Capgemini’s financial-services organization.

  Agreed acquisition value. $1.25 billion (Announced October 27, 2006)

  Source

• 2005

  Acquire Accurum for capital-markets expertiseM&A

  Background

  Kanbay’s business was concentrated in financial services, including capital markets, and it sought to deepen specialized technology capabilities.

  Action taken

  Kanbay acquired Accurum, a New York IT-services provider serving the capital-markets sector.

  Aftermath

  The acquisition broadened Kanbay’s financial-services offering and reinforced its capital-markets positioning.

  Source

• 2000

  Acquire Megatec to enter AustraliaM&A

  Background

  Kanbay sought to extend its international technology-services footprint and entered Australia through the purchase of Melbourne-based Megatec.

  Action taken

  Kanbay acquired Megatec, an electronic-business products and solutions company.

  Aftermath

  The transaction gave Kanbay an Australian market presence and added local e-business capabilities.

  Source

1. 1Kanbayen.wikipedia.org