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Covansys to buy 75% stake in Fortune
By agencies
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Monday, 13 June 2005, 19:30 IST
BARODA: Covansys India, a subsidiary of the U.S. based Covansys Corporation, intends to acquire up to 75 percent (4.05 million shares) of the Baroda based Fortune Infotech Ltd's common stock at Rs 32.50 a share.
Fortune has operations also in Bangalore and Princeton, New Jersey, and employs around 560.
Covansys, a consulting and technology services company that has 6,000 employees, intends to fund the acquisition with cash from its India operations. It does not expect the acquisition to have a material impact on its results in 2005, says the information available on Covansys Web site.
Under the terms of the transaction, Fortune will be a majority-owned subsidiary of Covansys India. K. Subrahmaniam, President and CEO, Covansys India, will oversee Fortune's operations following the close of the transaction.
The transaction is conditioned upon the satisfaction of customary conditions and regulatory approvals in India, and Covansys expects the transaction to close in 2005.
Fortune provides offshore outsourcing solutions focusing on business process outsourcing (BPO) and back office services such as transaction processing, claim processing and accounts payable processing services.
Raj Vattikuti, Covansys' President and Chief Executive Officer, said in the release, "Our acquisition of PDA Software Services in 2002 provided Covansys with valuable experience meeting clients' BPO needs and now, with Fortune, we are well-positioned to enhance this service offering.
"We will leverage Fortune's capabilities to enhance existing client relationships', he said.