Four Soft buys Danish firm for $10 million
Hyderabad-based Four Soft, a transport and logistics software technology company, has acquired Denmark-based Transaxiom Holding for a consideration of about $10 million in a cash cum stock deal.
The company is also planning to set up a BPO centre in Hyderabad at an investment of $1 million by April next year. Addressing reporters on Wednesday, Mr Srikanth Palem, CEO of Four Soft said, while 60% would be paid in cash, 40% would be in stocks over the next three years, based on performance.
“The initial stock purchase consideration of 35% in Transaxiom would be made by allotment of 17.7 lakh equity shares at Rs 75 each to sellers of the acquired company — Winning Alliance, FH Holding and Paul Rene Larsen,” he said.
The buyout will enable Four Soft to expand its presence to Australia, New Zealand and Scandinavian markets. “It has helped us consolidate our coverage in the transportation and logistics vertical. Our customer base has increased from 250 to 300," Mr Palem said.
According to him, the integration will start next month and it will be reflected in the fourth quarter revenues of Four Soft. Four Soft is expecting its revenues to touch Rs 175 crore by the end of this financial year. In 2005-06 the company had recorded revenues of Rs 94.8 crore. Transaxiom, a global provider of transportation and logistics solutions, had recorded revenues of $7.7 million in 2005.
Talking about the funding requirements, Mr Palem said the acquisition was being funded through a debt and equity at a ratio of 1:1. “We are planning to raise capital by issue of shares and warrants to select group of investors and institutions on preferential basis and to raise additional funds by way of issue of American depository receipts, global depository receipts, bonds or debentures,” he said.
The company is also looking at setting up a BPO center in Hyderabad for the logistics sector. “We are planning to set up the centre as a joint venture project and are in talks with a Japanese company for this. However, we are yet to work out the final details of the project,” he said.
Four Soft has also signed a contract for sale of its 4s Visilog product to Japan-based Matsushita Electric Industrial Company (Panasonic). The phase one of the project is valued at Rs 3.4 crore.
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