NTT DATA and NTT plan to combine their IT Services organizations outside Japan into a new operating company. The resulting IT consulting and MSP giant will have roughly $27 billion in annual revenues, based on 2021 financial results.
This is technology M&A deal number 456 that ChannelE2E has covered so far in 2022. See more than 1,000 technology M&A deals involving MSPs, MSSPs & IT service providers listed here.
The combined NTT Data-NTT IT services business is expected to have roughly 180,000 employees. Their pre-merger sales for fiscal year 2021 were a combined US$26.9 billion.
MSP, Data Center, IT Consulting and Edge-to-Cloud Services
The M&A announcement contained considerable jargon about multiple IT market shifts. But ultimately, NTT says the merger of its IT services businesses (outside of Japan) will deliver:
- Centralized client support
- Consistent service provisioning
- Focused investments
Further describing the M&A decision, NTT and NTT Data said they believe it is "necessary to further accelerate collaboration among NTT group companies and to further strengthen our business competitiveness, in order to contribute to the growth of our customers' businesses and to become a truly Trusted Global Innovator that supports social infrastructure for the long term."
Ahead of the M&A deal...
- NTT DATA's system integration capabilities span vertical market expertise, digital consulting, application development, and managed services, the company says.
- NTT Ltd.'s 'Edge to Cloud' service operation capabilities span data centers, networks and managed services.
IT Services M&A: Next Steps for NTT and NTT Data
Among the key dates and next steps to note:
- October 1, 2022: NTT Data and NTT plan to establish "overseas operating company jointly owned by NTT DATA (55%) and NTT (45%), respectively.
- July 2023: Within Japan, NTT Data will form a holding company umbrella that "enables the domestic and overseas operating companies under its umbrella to promote business in accordance with the needs and laws and regulations of each region."
Ahead of the M&A deal, NTT Data and NTT have been acquiring various assets to target cloud, supply chain, application, IT service management (ITSM) and cybersecurity market opportunities.
