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Thursday, Nov 04, 2004

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US firm to buy CashTech Solutions

Our Bureau

Pune , Nov. 3

THE Pune-based CashTech Solutions is to be acquired by the US-based Fundtech Ltd.

Under the terms of the agreement, Fundtech would pay $2.9 million in cash at the closing and an additional $0.4 million in cash within 180 days of closing. November 5 would be the closing day for the deal, Mr R. N. Iyer, Chief Executive Officer of CashTech Solutions, said here.

He added that an additional amount of up to $3.7 million in cash would be paid over the next three years, contingent upon the financial performance of CashTech.

Mr Iyer said CashTech would continue to operate as an independent subsidiary and would continue to invest in its product line. It closed the fiscal 2004 with revenue of $3.7 million and the current half-year has already seen the company crossing the halfway mark ($1.85 million) of the previous fiscal.

With this deal, CashTech products would be sold in the US and Europe through Fundtech while Fundtech's products would be sold in the Asian markets through CashTech.

Before the deal, Mr R.N. Iyer, Mr K.C. Bhushan and Mr Raj Subramaniam and a fourth entity held about17.5 per cent stake each, the venture capital Warburg Pincus which invested about $5 million in CashTech held 20 per cent, the ESOP trust holding 10 per cent.

Post-deal, the majority stake of 99 per cent would be with Fundtech.

Mr Iyer said the Chairman, President and Chief Operating Officer and the Chief Financial Officer of Fundtech would now be on the board of CashTech while the three founders would become the executive directors of CashTech.

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