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Mascon Global to acquire U.S. based company
By siliconindia
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Tuesday, 10 April 2007, 19:30 IST
Mumbai:Indian based software services firm Mascon Global is close to making an acquisition in the U.S. at an estimated deal size of more than $30 million (Rs128 crore) through a a stock-and-cash deal.The company has already obtained the board's approval to raise $20 million through issue of global depositary receipts (GDR) to fund the acquisition of 100 percent of the share capital of Target Company based in U.S. The Target company will benefit Mascon Global with its presence in banking, financial services, insurance and life sciences.
"When we will complete the acquisition, we will have a strong presence in wealth management and asset management practice," said K Chandra, Chairman Mascon Global adding that the acquisition is expected to add $40 million to the company's revenues in 2007-08 and $5 million to the earnings before interest, depreciation, taxes and amortization.
"When we do the acquisition, we are offering part of the company as shareholding to the new guys so that they can continue to work with us for the next five years," Chandra said.The stake offered would be in the range of 3-4 percent, but in return the target company would have to give a performance guarantee in terms of revenues and profits.
The company's growth comes from its manufacturing, life sciences and telecoms segments and currently nearly 90 percent of the company's revenues come from the U.S. while the rest are the U.K and Singapore. At the end of this financial year, Mascon expects revenues to exceed $200 million, including the acquisition.The company expects to have 70 percent revenues from the US, 18percent from Europe, 7-8 percent from Japan and the remaining from India in the next three years time.