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AppLabs plans $50 Million acquisition in U.S.
By siliconindia
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Thursday, 09 September 2010, 20:01 IST
Hyderabad: Sashi Reddi, the Founder and Chairman of the world's largest independent software testing quality management company, AppLabs, said that it is planning to acquire a U.S.-based company for about $50 million, reports the Business Standard.
"The move is primarily targeted at acquiring talent pool in a short while, going back to the old challenges. One significant acquisition in the US can help us plug a key requirement (workforce) for the company," he said. On the other hand, he declined to draw any time line for closing the deal.
AppLabs which is on an acquisition spree, had earlier acquired three companies - KeyLabs for $7 million in 2005, IS Integration for $37 million in 2006 and Hyderabad-based ValueMinds for an undisclosed sum in August 2010.
The company has raised $17 million from global venture capital funds such as Sequoia Capital and Silicon Valley Bank to fund these buyouts. Reddi said that the proposed acquisition will be funded through internal accruals and debt from banks and large private equity players.
The founder claimed that the debt-free company was expanding its presence in Hyderabad and was taking more space at the DLF special economic zone here at a cost of 
12 crore. The over $100-million company currently has over 2,000 globally, of which 1,650 work out of its Hyderabad centre.
Reddi said that the new facility would be fully operational by the end of this December and hopes to add more than 11,000 people in the next 12 months. The new recruitment at AppLabs, will include 60 per cent freshers and the rest laterals.
Looking at an estimated software testing market of about $6 billion and a growth rate of 20 percent, Reddi feels that the growth could be achieved if the testing moves from inhouse to outside. He puts tier-I players like IBM or Cognizant as its potential competitors in the market.
12 crore. The over $100-million company currently has over 2,000 globally, of which 1,650 work out of its Hyderabad centre.
Reddi said that the new facility would be fully operational by the end of this December and hopes to add more than 11,000 people in the next 12 months. The new recruitment at AppLabs, will include 60 per cent freshers and the rest laterals.
Looking at an estimated software testing market of about $6 billion and a growth rate of 20 percent, Reddi feels that the growth could be achieved if the testing moves from inhouse to outside. He puts tier-I players like IBM or Cognizant as its potential competitors in the market.
