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Our Bureau

Deal expected to close in May

Bangalore March 12

Electronic Data Systems (EDS) said Monday it has reached a definitive agreement to acquire Bangalore-based software testing firm RelQ Software Pvt Ltd for an undisclosed sum.

The RelQ buy-out would help EDS accelerate its existing global software testing, validation and verification services for enterprise clients, an EDS press release said. The deal is expected to close in May.

Though the financial terms were not disclosed, market speculation is that the deal was finalised around $40 million. RelQ, which specialises in software testing, validation, verification and quality assurance had clocked revenues of $21 million in 2005-06 and was targeting revenues of $30 million for the current financial year.

EDS said over time, RelQ would be fully integrated into EDS' global testing organisation. "RelQ's more than 700 employees in India, the UK, the US and France are expected to become a valuable part of EDS' global testing organisation," the release said.

"The RelQ acquisition fits with EDS' `zero defect' approach to applications development and deployment and complements existing on-site and offshore capabilities," said Mr Charlie Feld, Senior Executive Vice-President, Application Services, EDS.

ICICI Ventures and Acer Technologies of Taiwan together held a majority stake in RelQ, while the promoters' held "a little less than 50 per cent".

Declining to comment on the reasons for sell-out, the RelQ President and CEO, Mr Prakash Mutalik, said, "We are pleased that EDS is acquiring the capabilities and expertise of RelQ and its employees to better serve the needs of our combined client base."

RelQ offers testing services to clients in banking, financial services, telecom and consumer electronics industry. It also offers real time and embedded applications testing, including mission critical software testing. RelQ's clientele include companies such as Vodafone, Palm, HP, Philips, Sumitomo, Franklin Templeton, Deutsche Bank, Atari and Hasbrow.

More Stories on : Mergers & Acquisitions | Software

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