3i Infotech acquires US firm for Rs 54 cr
3i Infotech has acquired majority stake in the US-based business Professional Access as well as in the India-based E-Enable, a company engaged in business intelligence.
3i Infotech will pay $12 million (Rs 54 crore) to acquire 51 per cent stake in Professional Access, a service provider in the field of IT and management.
The company has a right to buy the remaining 49 per cent after two years, company officials told newspersons on Monday.
The valuation for the remaining 49 per cent will be arrived based on an earn-out formula depending on the revenues and profit after tax of the acquired company after two years, said Mr Amar Chintopanth, CFO.
Professional Access has offshore development centres in India and specialises in e-commerce for the BFSI and retail segments.
The company operates on an onsite-offshore model and has 500 people on its rolls.
Its clientele includes Citibank, JP Morgan, Goldman Sachs and Duke Energy.
"With this acquisition, we will get a good client base with deep relationships in the services business, which will allow us to further penetrate the US markets," said Mr V. Srinivasan, Managing Director and CEO of 3i Infotech.
The acquisition will be financed through the remainder of the funds raised from the two rounds of FCCB issues worth $70 million (Rs 315 crore), said Mr Chintopanth. "We expect to close the acquisition in two months."
Company officials said that with these acquisitions, 3i’s revenues for the fourth quarter would be in the range of Rs 225-240 crore.
"We are expecting revenues from banking and financial services segment to go up to 70 per cent in the current fiscal, from 60 per cent last year," said Mr Chintopanth.
The company would pursue its acquisitive growth strategy to fill gaps in the product space to enter new markets, said Mr Hari Padmanabhan, Deputy Managing Director.
3i has already made six acquisitions in the current year and is targeting 3-4 more companies before the end of the year.
"We are targeting 3-4 small acquisitions by March 2007, preferably in the BFSI vertical," said Mr Padmanabhan.
3i has also signed an agreement to acquire 51 per cent stake in the New Delhi-based E-Enable for Rs 5.1 crore. The company is focused on business intelligence and data warehousing.
The remaining 49 per cent would be acquired after March 31, 2008 the company said in a filing with the BSE.
"The acquisition will give us deep domain knowledge in the business intelligence space, which is a high-growth area globally," said Mr Padmanabhan.
On the BSE on Monday, the 3i scrip gained Rs 2.45 (1.33 per cent) to close at Rs 187.35.
Source:
