The dust has now settling on the Tech Mahindra-Satyam deal. It has been the biggest ever acquisition for any Mahindra group company. But is this deal a game changer for Tech Mahindra, as M&M Vice Chairman Anand Mahindra claimed at the press conference emerging the winner with its bid? Just like the deal has been finalised with the bidders having to make a whole host of assumptions, the answer to the all-important question is also with several 'ifs and buts'. It all boils down to who you are willing to believe. It is confirmed now that Tech Mahindra had carried out a due diligence on Satyam, some months before the December 16 board meeting. A possible merger between the two companies was being considered. However, after the due diligence, Tech Mahindra decided against going ahead with the merger of the two companies. (Subsequently, Satyam was also in talks with HCL Technologies but the deal could not be struck). With better understanding of Satyam's business, compared to rival bidders, did Tech Mahindra have an advantage? That cannot be ruled out. But Tech Mahindra has managed to buy Satyam for perhaps a third of the price that it would have paid less than a year ago. It is the liabilities of the company that is the biggest worry for the new owners now. The $1 billion liability arising from the Upaid case remains the biggest threat to Satyam. Since this is a case of forgery against Satyam, it could have disastrous impact for Satyam. The scope of the class action lawsuits in the US is still to be fixed. Will lawsuits from Indian investors also follow? Will Raju family also make a claim on the company? That brings us to the issue: Was Wilbur Ross, given his enviable experience in buying distressed assets, smart with his bid at Rs.20/share against Tech Mahindra's Rs.58/share? Did Tech Mahindra over-leverage itself by paying almost three times the price that the lowest bidder paid? What surely must have been on the mind of Tech Mahindra top brass when they went about the numbers must have been the need to diversify the revenue stream for Tech Mahindra. Well over 50% of its revenues come from BT Group (earlier British Telecom) and its dependence on the telecom sector has been the biggest concern. With a Rs.1750 crore spend for the 31% stake, it has managed to diversify its client base with almost no overlap. With reported sales of Rs.3766 crore in FY08, if Satyam's revenues add up to another billion dollars, the scale at which Tech Mahindra will operate will now be altered dramatically. With the combined revenues of the two companies, it puts Tech Mahindra is the big league of IT services companies in the country. This is the big game changer that Anand Mahindra was referring to. This will also require a reworking on the management for Tech Mahindra, so that the new businesses can be driven aggressively, a tough ask at a time when there is a general slowdown in the IT services industry globally.