The Hindu Business Line : Valtech to buy Majoris for 4.8 m euros

Valtech's move is seen as a strategy to compress cost, as it would ship more work offshore. It aims to enter the league of global offshore players within the next two years.

Bangalore , Sept. 9

FRENCH software firm Valtech will buy Bangalore-based software exporter Majoris Systems for a base price of 4.8 million euros (about Rs 26. 68 crore). The buy-out pact includes a three-year earn-out that could add to a maximum of 3.6 million euros to the transaction price, Valtech said in a news release.

Valtech will finance the entire transaction cost through its existing and future free cash flow. In addition, Valtech will invest up to 1 million euros over the next 12 months to build up the Indian delivery centre's infrastructure.

The acquisition of Majoris, which is subject to approval from regulatory authorities, will be consolidated from September 1. With this acquisition, 200 billable software professionals will come on board Valtech. After the integration of Valtech's Indian unit with Majoris, Valtech's offshore delivery presence is likely to swell over 300.

Majoris reported revenues close to 5 million euros in 2003. The combined entity will initially service 18 clients across Europe and the US. Currently, Majoris serves 10 clients globally.

Top Majoris officials were not available for comment as they were out of the country. Majoris was promoted by Mr B.V.Venkatesh, the former founder of BFL Software.

The company currently offers services across retail, healthcare, banking and finance, manufacturing, telecommunications and high technology.

Valtech's move to buy Majoris is seen as a strategy to compress cost, as it would ship more work offshore. Valtech even aims to "enter the league of the global offshore players within the next two years."

The French firm has forecast second half revenue of 41-43 million euros, which will include revenues from Majoris for the last four months of the current year.

It reported revenue of 41 million euros in the first half with a net profit of 0.5 million euros.

Valtech had a net cash and cash equivalents position of 7.5 million euros, overdrafts of one million euros, and leasing commitments of 0.4 million euros as on the end of its first half of the current year.

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