SSI to acquire London IT firm
By siliconindia staff writer   |   Friday, 03 October 2003, 19:30 IST
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MUMBAI: The Chennai-based software services company SSI may consider acquiring a London-based IT consulting firm. The consulting firm, listed on the London Stock Exchange, offers software and IT consulting services in the government, financial services and manufacturing sectors. The $120-million company employs 1,500 people. The firm has a huge accumulated debt and plans to raise money from the market early this year. “SSI has been in talks with the firm for about four months now and has conducted several meetings with the firm’s management. It appears that there is synergy in the business strategy of the two companies,” sources familiar with the process said. Though the valuation may not be a negotiation point at this stage, SSI seems to be treading cautiously before it settles down for the acquisition at a price which might not be worthwhile, sources said. Senior company officials could not be reached for a comment. The size of the acquisition would be based on a three-year return on investment. The market cap of the firm and the profitability SSI can generate after the acquisition is complete. If the acquisition were to materialise, SSI is likely to retain most of the consulting firm’s employees along with contracts from third-party companies, according to sources. In July this year, SSI’s chairman and CEO Kalpathi Suresh had said that the company was in talks with several second-rung service firms, both in the US and India, to consider acquiring them. SSI has plans to raise $50 million through issue of equities and/or convertible securities in foreign or domestic markets for funding organic growth and acquisitions. The company said earlier that it could offer up to $50 million additionally in equities and/or convertible securities. The company’s shareholders recently approved increase in the authorised share capital to Rs 50 crore (divided into 5 crore equity shares of Rs 10 each) from Rs 25 crore (2.5 crore equity shares of Rs 10 each). (Source: Economic Times)

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