The Hindu Business Line : Infotech scouts for buys in automotive space

New Delhi, Aug. 24 Infotech Enterprises Ltd on Friday said it is in talks with US and Europe-based companies specialising in engineering design services in automotive, and hi-tech, consumer and medical electronics (HCM) space, for making a possible acquisition.

The company — which raised Rs 300 crore recently — said it plans to acquire firms with strong customer relationships in these two segments.

“We have not achieved the desired scale in the automotive vertical and hence an acquisition can help us jumpstart that practice. HCM, on the other hand, is a recent focus area keeping in mind the potential it offers. Hence an acquisition strategy will help us with a growth momentum in the two verticals,” Mr B.V.R. Mohan Reddy, Chairman and Managing Director of Infotech Enterprises Ltd, told Business Line.

Infotech Enterprises, which is listed on the BSE and the NSE, is in advanced stage of talks with a $10-million company in the HCM space. “There are ongoing issues around valuation and we are currently trying to sort it out,” he said, adding that acquisition in the automotive space was likely to be relatively larger in size.

“The companies in engineering design services in the automotive segment are likely to have revenues of between $30-40 million,” he said.

“In pursuing our acquisition strategy, we will not be constrained by the size of the company. We have close to Rs 300 crore with us and are a debt free company. Hence we have the option of raising debt, if required. Our main criteria for the acquisition, is a right fit,” the CMD said.

The company — which hopes to add 1,000 professionals by the end of the fiscal to reach a headcount of 7,000 by March 2008 — currently derives bulk of its engineering design service revenues from the aerospace segment.

Besides engineering design services, the company’s service lines also include Geospatial Information Services and IT services. The Hyderabad-headquartered company clocked revenue of about $120 million for the year ended March 2007, with profit pegged at $18 million.

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