Processing .....please wait.. 
The article has been forwarded.... 
News >> Technology >>
Venture Tech, SAIF take majority in Intelligroup
By siliconindia staff writer
|
Tuesday, 05 October 2004, 19:30 IST
CHENNAI: Venture Tech Assets, a strategic investor in technology and an iLabs Group affiliate, together with Softbank Asia Infrastructure Fund (SAIF), an unit of Softbank Corporation, have acquired a majority equity stake in Intelligroup.
Venture Tech and SAIF picked up 17,647,058 shares of Intelligroups equity, through a $15m private placement that was completed late last week.
The two now own approximately 50.3% of the companys issued equity and can now designate five out of the nine members on Intelligroups board.
Intelligroup is a global provider of strategic IT outsourcing services with a large, growing Indian offshore presence.
Intelligroups Indian operations are based out of Hyderabad and it employees around 1,200 people. Globally, the company achieved an annual sales of about $120m in 03 and expects to increase this to above $130m in 04.
This transaction is reflective of Venture Techs philosophy of active investment in businesses with solid momentum and a sound base of customers and management, a company spokesman said.
The revenue base of Intelligroup easily places it in the top ten Indian offshore/onsite IT service providers and will help harness the tremendous opportunities in the global technology services marketplace, he added.
Intelligroup was probably one of the first desi-oriented
IT company to come out with an IPO in the US, and was one of the largest ERP implementor outside the big four IT service providers globally.
In fact, by 1998, Intelligroup had notched annual sales of over $140m and around then companies like Infosys and Wipro were chugging along with sales that were much less. However, while the others whizzed past, Intelligroups growth seems to have been sluggish thereafter.
Venture Tech and SAIF were the same duo that made an investment in Sify in late 02, wherein they had invested $20m together and that allowed them to take preferential shareholders rights in Sify.
The trigger for that investment was Satyam Computers long stated desire to exit Sify. Venture Tech also became the designated promoter of Sify.
When contacted, Sandeep Reddy, vice chairman and co-founder of iLabs Group said, Unlike in the case of Sify, where we took preferential shareholders rights, we have taken a controlling stake in Intelligroup. We have to move quickly now because the big players are pulling away.
Set up in the late 80s, Intelligroup created the industrys first offshore lab dedicated to SAP development in 1995. Since then, its India-based offshore services, coupled with its US and UK centres, have helped hundreds of clients develop, implement, maintain, support and integrate ERP, e-commerce and m-commerce applications.
Throughout mid-to-late 90s, it grew significantly by capitalising on the expanding ERP market. It first began to provide services to customers implementing SAP software before expanding the scope to include ERP products developed by Oracle in 1995 and PeopleSoft in 1997.
In late 1999, it made the strategic decision to leverage its traditional application integration and consulting experience and re-position Intelligroup by focusing on the then emerging Application Service Provider (ASP) market.
Around that time, it also spun-off its internet services business to SeraNova, a wholly-owned subsidiary of the company then.
Intelligroups stagnation, partly, is attributed to this re-position. It has to be seen, if Venture Tech and SAIF are able to accelerate Intelligroup into the future.