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Megasoft aims $50-m size post merger with Xius
By siliconindia staff writer
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Monday, 09 February 2004, 20:30 IST
CHENNAI: Megasoft, which is in the process of merging with Xius, aims to be a $50-million software firm in the next two years providing IP-driven technology solutions, reports Economic Times.
Megasoft is a software services provider with a delivery centre in Chennai with 330 people on its rolls. Xius is a telecom products company. The merger was announced a few weeks back.
The merged entity, to be called Megasoft, will focus on verticals like telecom, BFSI and healthcare and will target markets like Europe, the Middle East, the US and Russia. We expect the topline to go up to $25 million next year from the combined turnover of $19 million last year. The number of employees will increase from 400 to 500. As both the companies are cash-positive, we will not be looking for outside funding in the immediate future, said Ravi S Reddy, Chairman & CEO, Megasoft, at press conference here on Friday.
The company, which has been allotted a six-acre land in Hyderabad, plans to set up an offshore development centre in the long-term. The company might opt for a GDR issue to raise the required funds. Post merger, shareholders of Megasoft would have 60% holding, while Xius shareholders would have 40%. The investors (in Megasoft) like I-Labs, owned by Srini Raju, and the ProLease Group would have 20% and 13.5% stake respectively.
G V Kumar, MD & CEO, Xius, said that Megasoft has deep client servicing and solutions know-how and mindset, while Xius has telecom domain knowledge and IP mindset. The combination of the two would be an early entrant to the solution sourcing market, he said.