The Hindu Business Line : Blue Star Info seeking strategic partners to fund buys

The zero-debt company with Rs 21.3 crore in cash or cash equivalents as on September 30, 2003 "would raise the M&A budget through internal accruals, promoters and strategic investors.," Mr Parmod K. Bhalla, Managing Director, BSIL, said.

For the first half ended September 30, 2003 BSIL recorded Rs 48.4 crore in revenues and Rs 10.6 crore in net profit. With the acquisitions, the company expects to record a 10-20 per cent growth as this move would "enable us to target the mid-sized enterprise globally while giving us access to the Fortune 100 companies and strengthen our position in the tier II Indian IT segment," Mr Bhalla told Business Line.

With two acquisitions planned over a two-year time frame, the company is in the process of evaluating prospects. Target companies are IT firms specialising in IBM AS 400 platform and software package implementation, in particular SAP. This would complement BSIL's offering in the HP 3000 application platform.

BSIL proposes to initiate the second acquisition after completing the integration of the first company into its fold.

"Ideally we will begin the second acquisition six months to a year after the first has been completed and we would be looking at additional resources to fund more acquisitions," Mr Bhalla said.

The tier II software firm estimates the contract value from a mid-sized client to be in the $1 million to $2 million range per year.

The thrust would be on retail, manufacturing, travel and marketing verticals with service offerings such as enterprise architecture, solution implementation, enterprise integration and application development.