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BL Research Bureau

3i Infotech’s (3i) acquisition of US-based J&B Software (J&B) Inc signals its move to expand inorganically and also augment its software products offering. The deal is valued at $25.25 million and 3i has indicated that the acquisition would be EPS accretive.

J&B is a product software for functions such as processing and managing automated electronic payment transactions of banks, insurance companies, mutual fund providers, credit card processors and even telecom companies.

This acquisition creates several advantages for 3i. First, it would enable the company to expand its North American footprint by tapping J&B’s clientele. 3i had earlier entered the European markets through the acquisition of Rhyme systems late last year.

The company’s European business has shown increasing contribution to revenues (20 per cent).

It would augur well for the company if it can replicate that success in the present acquisition.

Second, J&B’s product software would be a significant addition to 3i’s product portfolio in the BFSI segment. Products constitute over 40 per cent of the revenues and is typically a high margin business. The share of this segment is likely to increase with the acquisition.

Thirdly, with J&B’s offering, which may be on open architecture platforms, 3i would be better placed to tap other high-potential markets such as Asia-Pacific.

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