The Hindu Business Line : TCG Soft, Ivega Corp to merge — Stock and cash deal to close by July

BANGALORE-based software services firm, Ivega Corporation and TCG Software of The Chatterjee Group, announced their merger on Wednesday to create a new entity TCG-Ivega.

The TCG Group, which bought out the 40 per cent stake held by venture capital firms Global Technology Ventures and ChrysCapital in Ivega, will have a controlling stake in the merged entity. Ivega is issuing additional shares to The Chatterjee Group. The stock and cash deal, is expected to close by July, pending regulatory approval.

TCG-Ivega aims to provide specialised IT services to TCG Software and Ivega's overlapping financial services. The new entity would target clients from the pharmaceutical, healthcare, manufacturing and telecommunication sectors across India, West Asia, Asia Pacific, North America and Europe. Mr Giri Devanur, Chairman and CEO of Ivega Corp, will be the Managing Director and CEO of TCG-Ivega.

For the year ended March 31, 2004, TCG Software had revenue of close to $16 million whereas Ivega's earnings stood at $6 million for the same period. ``We currently have a revenue run-rate of Rs 100 crore and expect to grow at 30 per cent in the current year,'' said Mr Devanur told Business Line.

``We are looking at a revenue of $30 million for the current year through organic growth,'' he said, adding that the company could go in for an acquisition in the US soon. Post-merger TCG-Ivega's combined headcount stands at 700. Ivega has a development centre in Bangalore, where it has 220 people, while TCG Software has development centres in Kolkota and Mumbai with a total headcount of over 400.

Commenting on the merger, Dr Purnendu Chatterjee, Chairman of The Chatterjee Group, said, ``The merger will create an exciting new force in specialist information technology services. Both companies performed well in 2003 and are coming together from positions of strength at a time when there are significant opportunities for enhanced future growth. The new entity will be better placed to capture and exploit this growth.''

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