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Our Bureau

To part-finance Chennai unit from IPO proceeds

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Chennai Feb. 3 MindTree Consulting Ltd has signed a non-binding "term sheet" to acquire an IC (integrated circuit) design company through an all-cash consideration, according to the company's Chief Operating Officer, Mr Subroto Bagchi.

The target company has a sales presence in the US and a delivery centre in India. If the deal goes through, the target company would strengthen MindTree's IC design capability and give access to new customers, he told newspersons while announcing the company's initial public offer (IPO), which opens on February 9 and closes on February 14.

Mr Bagchi declined to give further details, including financial and employee strength, about the target company.

MindTree, the Bangalore-based IT and R&D services company, has capabilities in IC design. For instance, in December 2005 it developed an analog IC that enhanced the life of batteries used in handheld devices.

This IC for a Korean semiconductor and wireless products company measured 1.5 mm and was equipped with intelligent power management features for Lithium-ion batteries.

Mr Rostow Ravanan, Chief Financial Officer, MindTree, said the company was setting up a new development centre in Mahindra World City, Chennai. The 2.8-lakh sq ft centre would be available to the company by November and could accommodate around 2,800 employees.

According to Mr Ravanan, the company will raise Rs 237.5 crore from the IPO, and of this amount Rs 120 crore would be used to part-finance the Chennai facility.

More Stories on : Mergers & Acquisitions | Software

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