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Logix in talks to acquire U.S. firm
By siliconindia
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Wednesday, 23 January 2008, 02:30 IST
Mumbai: Logix Microsystems, a Bangalore based automotive e-retailing solutions company, plans to acquire a U.S. based company for $20-50 million (Rs 80-200 crore) in the automotive solutions segment, reported the Business Standard. The deal will be finalized in the first or second quarter of this year.
Logix recently acquired the majority stake in Los Angeles based Add-on-Auto for Rs 6 crore. The major share of the company's profit is from the U.S. market and the slowdown in the U.S. market has not affected the growth of the company, reported the source.
"The slowdown in the U.S. market has brought good business for us. In the last three-four months, we have signed deals worth $1 million a month. On an average, we sign deals in the range of $600,000-700,000 a month," said Sanjay Soni, MD, Logix Microsystems.
According to Soni the valuation of companies in the U.S. have come down by at least 15 percent and is a good time for acquisitions. The car market is a $ 650 billion segment and car accessories market in the U.S. is a $150 billion opportunity.
Even though Logix's online portal izmocar charges 40 percent more than its competitors in the U.S. market, the company is witnessing a steady growth, Soni told Business Standard.
"The US is a very mature market. In some cases we are able to generate 800-1,000 leads a month," he added.
The company plans to enter the European market as soon as possible and also plans to target Japanese and Chinese markets by 2010. The company is also planning to expand its Indian operations.
"We will be entering into the European market by March 2008. We have found a good partner in Europe and will soon announce a joint venture. This is happening earlier than expected," said Soni.
Currently in India, the services are available only in Bangalore, Mumbai and Delhi. By June 2008 the services will be extended to eight other cities, including Chandigarh, Ludhiana and Haryana.
For Logix, Germany and the UK will be two important markets. While the U.S. will continue to be the biggest market, Soni expects a 5-10 percent of revenues from the European market and 10 percent from India.
Within four months of its launching Carazoo, the interactive car portal exclusive for the Indian market, the site registers about 1.5 lakh visitors a day and generates 250 leads a day.
"The Indian market is very slow. But we see a huge potential here. We aim to have at least 1 million visitors a day with 1,000 leads," said Soni.
Apart from acquisitions, the company is focusing on its R&D unit. The company annually invests around Rs 5-6 crore on R&D.
"We have developed a mobile application for the auto segment. With this a user can access all the services with regards to his / her auto needs through their mobile handsets," said Soni.
The company is also in the process of developing solutions for the real estate and the hotel industry. For the financial year 2007-08, the company expects to achieve revenues of Rs 50-55 crore and aims at Rs 80-100 crore for the FY 08-09.