SCS to pick up 30% stake in Kshema

By siliconindia   |   Thursday, 09 January 2003, 20:30 IST
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Bangalore-based Kshema Technologies Thursday announced that Singapore Computer Systems (SCS), a Singapore based public listed company has made a strategic investment of $9.2 Million for a 30 percent stake in the company.

BANGALORE: The investment is subject to approval by India’s Ministry of Commerce and Industry and the Reserve Bank of India. Incorporated in 1980, SCS is a leading information and communications technology (ICT) service provider in the Asia-Pacific region. SCS’ key competencies are in IT and Business Consultancy, Systems Integration, Outsourcing, Networking, E-Business and R&D/Product Development. The company has a wide geographical reach, employing 2,000 people who operate from Singapore and eight other countries. Anant Koppar, chairman and chief executive of Kshema said, "As a high-achieving organization, we’ve always shown admirable levels of prudence and maturity in partnering well. With the growing opportunity in current markets, we were in search of a strategic partnership that would not only be in step with our overall strategy, but would also spur our future growth more aggressively. SCS is an established systems integrator and with their wide network and capabilities, we can now broaden our offerings and increase market access as well." Kris Nair, Executive Vice President, Kshema Technologies said, "The digital economy now demands that organizations work together to rapidly and continually implement new business strategies in fast-evolving markets. The partnership with SCS apart from increasing our market reach, gives us an opportunity to share diverse ideas and perspectives which would act as a catalyst for new ways of thinking that ultimately defines our client’s business edge". SCS’ investment in Kshema is part of its strategy to become a global IT services company. Acquiring a stake in Kshema offers SCS an opportunity to expand into India, a target market for SCS’ global expansion. This geographical expansion will strengthen SCS’ overall presence in the region. "Our investment in Kshema allows SCS to strengthen both market presence and domain expertise. We chose Kshema because of its good track record for revenue growth and profitability, strong management team, and strong domain knowledge and expertise" said Stephen Yeo, president and chief executive of SCS. "Working with Kshema, we hope to achieve synergies through sales and marketing, technical collaboration, research and development and various other initiatives," Yeo added. Through Kshema’s existing networks, SCS will also be able to establish its presence in USA and Europe to extend its service footprint for customers whom SCS is already serving in the region. SCS would also be able to gain new business opportunities by tapping into Kshema’s customer base in those geographies. SCS will leverage Kshema’s breadth of domain knowledge and expertise in embedded technologies, which is a fast-growing area. According to the Indian National Association of Software and Services Company-McKinsey Report 2002, the embedded software market will achieve a CAGR growth of 16% over the next three years. Kshema has maintained over 50% compound annual growth rate (CAGR) in revenue for the last three years. For the financial year ended 31 March 2002, the company achieved revenues of $11.7 million with a net profit after tax of $2.6 million.