Financial Daily from THE HINDU group of publications
Wednesday, Nov 23, 2005
Financial Daily from THE HINDU group of publications Wednesday, Nov 23, 2005 |
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Software Info-Tech - Mergers & Acquisitions To beef up presence in BI, consulting space — KPIT Cummins Info to buy US, French cos Our Bureau
Pune , Nov. 22 CUMMINS Infotech in 2001, Panex Consulting in 2003 and now SolvCentral, a US-based company and Pivolis, a Paris-based company, are all in the kitty of the Pune-based KPIT Cummins Infosystems Ltd. The board of directors approved the decision to acquire SolvCentral and Pivolis at the recent meeting. Talking to presspersons, Mr Ravi Pandit, Chairman and Group Chief Executive Officer, KPIT Cummins, said the company had entered into a definitive agreement to acquire 90 per cent stake of SolvCentral for $2 million and the remaining equity stake would be acquired over a three-year period. He noted that the price would be based on quality and quantity of revenues and would be a mix of cash and stock options. Mr Ravi said the revenue of SolvCentral would be around $3.5 million for the current year. The revenue growth (CAGR 2001-04) was around 81 per cent and the profit growth was about 95 per cent. The company which is in the fifth year of operation has a total strength of 30 personnel and is headquartered in Virginia and has a small presence in Indore. Mr Ravi said the company, which offers BI (business intelligence) strategy consulting, products and implementation, has also developed packaged offerings — SlvWebiPack, SolvMonitor,SolvDashboard, SolvBroadcast and SolvCache — that could be leveraged by KPIT Cummins for its clientele. The company is promoted by Mr Probodh Chiplunkar, an Indian based in the US. In the Paris-based Pivolis, he said, KPIT Cummins would acquire 70 per cent stake for a consideration of 1.75 million Euros, comprising 50 per cent cash and 50 per cent stock. The balance stake would be acquired within three years, he said. The payment for the remaining stake would be based on the offshore revenue of Pivolis and would be a mix of stock and cash, he said. Pivolis is an offshore consulting services providing company. He said that the company's revenue for the current year would be about 2.5 million euros with a gross profit margin of 30 per cent. According to him, with this KPIT Cummins would be able to establish a presence in France, which is the second largest economy in Europe. He added that this would be bring in an additional revenue of $10 million. Mr Pandit on further acquisition plans said the company was looking at China and Eastern Europe. He noted that Eastern Europe could be used as a near-shore operation to other European markets and China to tap into the markets of Japan. He said, "Though no plans are on the anvil, the company is studying these two markets." He said that the company might look at setting up a delivery centre in Chinato to cater to the Japanese market.
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