Processing .....please wait.. 
The article has been forwarded.... 
STG entry may trigger bidding for Aztecsoft
By siliconindia
|
Saturday, 23 February 2008, 02:39 IST
Bangalore: Symphony Services is mulling to acquire mid-tier IT services company Aztecsoft, sources said. The target company, put on the block by promoters e4e and Canaan Partners, has been in serious discussions with MindTree Consulting, reported The Economic Times.
Symphony's move may trigger a belated competitive bidding for Aztecsoft. The development also comes at a time when Aztecsoft's depressed stock price may have sobered the valuation play.
Though yet to be confirmed, the information also suggest that U.S. based GlobalLogic and Pune based Persistent Systems, both of which are in the same outsourced product engineering space, may have shown interest in acquiring Aztecsoft.
Romesh Wadhwani, Chairman, Symphony Technology Group (STG), the holding company of Symphony Services, recently raised $1 billion, a second corpus for acquiring software services companies globally. The $2 billion STG is projecting a $5 billion revenue target in the next three years through aggressive acquisition-led growth.
It is believed that promoters would expect around $150 million in enterprise valuation. But the tanking Mcap and a rather sedate environment forecast for the sector, for the time being at least, could queer the valuation story. e4e and Canaan together own around 34 percent stake in Aztecsoft. The company stock closed at Rs 72 on BSE pegging its Mcap at around Rs 326 crore ($81.5 million) more than halving over a one year period.
Sources said Symphony Services might be interested in Aztecsoft, given the fact that both are operating in the same space - outsourced product development and it could also get some key accounts, if the acquisition goes through.
During FY07, Aztecsoft reported revenue of Rs 264 crore ($66 million) with a net profit of Rs 38 crore. For the second quarter of FY08, its revenue touched Rs 62.01 crore ($15 million), showing a quarter-on-quarter (QoQ) growth of five percent with net profit rising by 37 percent.