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V.Rishi Kumar

Hyderabad , Aug. 19

MEGASOFT Ltd, provider of technology solutions, has firmed up plans for a major alliance-driven expansion, where it plans to invest about $5 million by next year.

It is close to finalising a joint venture to address the Asia-Pacific market and is in the process of zeroing on an acquisition in the US. This follows its recent acquisition of Beam Technologies in Germany, which is now serving the company to support its European operations.

The Managing Director of Megasoft, Mr G.V. Kumar, told Business Line, "One of the challenges a products company like Megasoft faces is the ability to market them effectively in new markets. After analysing this aspect very carefully, we have decided to partner companies in the region we plan to set up business."

On the lines of its partnership with Hewlett-Packard which enabled it to target more clients, the arrangement with Teleglobe, application services provider partner, has facilitated access to more than 100 countries the company is present in. The new investments would be aimed at consolidating more ventures, participating in local expos and also creating test labs to assure the potential clients.

After the conclusion of merger of Xius with Megasoft, the telecom business is growing at a pretty fast clip. "Markets in the Asia-Pacific region, Latin American countries, Africa and Eastern Europe where the telecom market is witness to rapid expansion, present us the opportunity to penetrate with out solutions. These alliances would help in faster growth,'' Mr Kumar said.

Mr Kumar said: "We expect to close this year with total revenues of about Rs 115 crore, up from Rs 85 crore last year. The investment of about $5 million would be mainly through internal accruals."

"If we are to aquire a US-based company, we might have to raise additional funds. However, this could be either through a rights issue, or a fully convertible bond issue or could even be through a GDR offer. Details of this have not yet been worked out," he said.

Apart from technology services and telecom area, Megasoft is eyeing the life sciences segment targeting the market for clinical trails. As a part of this strategy to increase transactional revenues, the company has partnered with Registrat that would help it reach more customers, Mr Kumar said.

"The research and development team at Hyderabad centre is being further expanded and we expect to induct about 60 more experts during this year," he said.

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