The Hindu Business Line : VisualSoft, AppLabs, eSolutions to merge — D.V.S. Raju quits as VisualSoft Chairman

VISUALSOFT Technologies Ltd, an IT services provider, AppLabs Technologies Private Ltd, a testing services company, and eSolutions Private Ltd based in Chennai, have announced a three-way merger plan here today.

The merger will create a new entity that will provide software testing, product development and services and serve about 400 customers globally. With combined resources of 1,800 employees, VisualSoft will have infrastructure, reach and serve as a larger entity.

The companies expect this to bring in operational rationalisation and optimise resource utilisation.

The VisualSoft board today authorised the Managing Director, Mr Sudhakar R. Gunturu, to appoint legal counsel and chartered accountant to work out the scheme of amalgamation. These would be subject to approval by statutory authorities, stock exchanges and High Courts of Andhra Pradesh and Tamil Nadu.

In the meantime, the founder Chairman of VisualSoft, Mr D.V.S. Raju, has tendered his resignation from the company and Mr Sashi Reddi, Chief Executive Officer of AppLabs, has been chosen as CEO of Visualsoft.

The Chief Financial Officer of VisualSoft, Mr V. Krishnan, told Business Line "it is a win-win situation for all the three companies. We would be able to provide technology solutions, testing and enterprise services. The combined entity would be able to notch up upwards of $40 million in revenues."

"Once the merger process was over and the necessary regulatory issues sorted out, we would be able to reflect good performance during next fiscal," he said.

Mr Raju told Business Line that he had resigned to concentrate on the Gangavaram port project.

Details of the merger were not available.

AppLabs has a turnover of $22 million (about Rs 100 crore) and eSolutions is a software company based in Chennai with revenues of $1.2 million.

VisualSoft results: VisualSoft recorded a total income of Rs 54.13 crore and a net profit of Rs 6.10 crore during the quarter ended September 30, 2005 as against total income of Rs 47.14 crore and a net profit of Rs 6.52 crore for the corresponding quarter last year.

Last fiscal, VisualSoft recorded total revenues of Rs 192.87 crore and a net profit of Rs 28.33 crore.

Earlier during the year, Softbank arm and others (Mr Srini Raju) had picked up about 20 per cent stake in the company from some core promoters.

VisualSoft shares ended the day at Rs 185 from previous day's close of Rs 181.60 at the NSE.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Incessant rains throw Chennai out of gear

Bharti Tele consolidated profit rises 43 pc in Q2

`Rupee under pressure; more FII exit likely'

Alfred Ford to lay out a ski village

Left reiterates opposition to FDI in retail — Divesting `small portions' of non-navaratna PSUs discussed

Reliance scores high on sales — Q2 net up 41.6% at Rs 2,481 cr

VisualSoft, AppLabs, eSolutions to merge — D.V.S. Raju quits as VisualSoft Chairman

NIIT Q2 net rises 12 pc

Sensex down 176 points as SBI, Bharti results disappoint

Broadband tariff set to come down by 50 pc