The Hindu Business Line : Zensar arm buys US firm for $24.9 m

IN BUY MODE: (From left) Mr Ganesh Natarajan, Deputy CMD, Zensar Technologies; Mr Harsh Goenka, Chairman; and Mr Joseph Ung, Managing Partner, ThoughtDigital, at a press conference in Mumbai on Friday. - Paul Noronha

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Mumbai Feb 23 Zensar Technologies said on Friday that its wholly owned subsidiary, Zensar Technologies Inc (USA), has entered into an agreement with SOA Software Inc to acquire ThoughtDigital LLC, a US-based company, in an all-cash deal worth $24.9 million (Rs 112 crore).

The SOA Software-owned ThoughtDigital clocked turnover of $27 million (Rs 121.5 crore) for the year ended December 2006 and employs 120 Oracle consultants.

ThoughtDigital is a certified Oracle EBS Implementation Partner with clients in verticals like communications and media, financial services and consumer products and services, according to a company release.

A special purpose vehicle called Zensar TD LLC has been floated to acquire, own and operate the business of ThoughtDigital, the company said in a statement to the BSE.

The acquisition will be a shot in the arm for Zensar's plans to clock $100 million (Rs 450 crore) in revenue in the enterprise application services space by 2008 and would add business clients to its non-Oracle offerings, according to Mr Nitin Parab, Senior Vice-President (Enterprise Application Services).

The acquisition will be funded 60 per cent by borrowings and 40 per cent through internal accruals, said Mr S. Balasubramaniam, Vice-President and CFO.

The deal would also include the earn-out clause to be paid to ThoughtDigital over the next two years, said Dr Ganesh Natarajan, Deputy Chairman and CEO.

Post-acquisition, the entire management team of ThoughtDigital will be retained, he added.

Based out of Pune, Zensar is a joint venture between Fujitsu Services and the RPG Group, with Electra Investments Trust as an institutional investor.

The Zensar scrip lost 5.47 per cent to close at Rs 227.95 on the BSE today.

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