The Hindu Business Line : Sasken to buy Botnia, two arms in all-cash deal

Growing stronger in Europe: Mr Prabhas Kumar, COO, Sasken Communication Technologies and Ms Neeta Revankar, CFO, at a press conference in Bangalore on Wednesday. - G.R.N. Somashekar

Bangalore , July 26

Sasken Communication Technologies said on Wednesday that it was acquiring the Finland-based Botnia Hightech Oy and its two subsidiaries for € 35.5 million (about Rs 200 crore) in an all cash deal.

The Kaustinen-based Botnia provides wireless R&D, hardware, software, mechanical design and testing services to mobile handset vendors.

Mr Prabas Kumar, COO, Sasken, said the acquisition would help Sasken enhance its wireless capabilities in key areas such as radio frequency engineering, antenna design, base-band engineering, mechanical design among others.

Further, the company would establish a global centre of excellence for hardware and mechanical design in Finland, he said.

Botnia, with about 230 people, had revenues of € 17.7 million with profit after tax of € 2.9 million for the year-ended April 2006. Botnia's main operations are in Finland with additional operations in Denmark and Germany. With 11 clients including a Tier I customer, Botnia would become a 100 per cent subsidiary of Sasken, Mr Kumar said.

Sasken shares closed two per cent higher on the BSE at Rs 266 after touching an intra-day high of Rs 280.

Sasken expects to part finance the Botnia deal from internal accruals, besides raising $50 million in fresh capital for which it already has got the shareholders' approval last month.

The CFO, Ms Neeta Revankar, said the company would finalise its plans to raise fresh capital to fund the acquisition in two weeks' time.

"We will decide the amount and the instruments through which to raise the money in two weeks. These instruments could range from pure equity to convertible debt and even pure overseas debt," Ms Revankar said without elaborating.

Mr Kumar said the entire deal would be closed in a few months and the joint offering to clients would be made from September. Sasken's scale would help Botnia to take up bigger projects by leveraging the back-end resources in India, he said.

Further, Sasken that already has development centres in Mexico and China would now spread wide in Europe, with Botnia acting as its arm in the continent, Mr Kumar said.

The Sasken Chairman and CEO, Mr Rajiv Mody, said, "Botnia's European presence and its expertise, combined with Sasken's global reach and India-based development centres, will enable us to offer a compelling portfolio of value-added solutions to our customers across the globe."

More Stories on : Overseas Investments | Mergers & Acquisitions | Software

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