The Hindu Business Line : MindTree buying 32.57% stake in Aztecsoft for $90 m

Mr Ashok Soota (right), Chairman and Managing Director, MindTree, with Mr Samir Bodas, Chief Executive Officer, Aztecsoft, at a press conference in Bangalore on Friday.

Our Bureau

Bangalore, May 2 MindTree Ltd, an IT and R&D services company, said it agreed to buy a majority stake of 32.57 per cent in Aztecsoft Ltd from its largest shareholder e4e Holdings Ltd for Rs 80 per share, which values Aztecsoft at $90 million.

Aztecsoft provides product engineering, independent testing, sustenance engineering and professional services to application and infrastructure software vendors and Internet-based companies, MindTree said.

The deal is an all cash deal and the company would fund it through internal cash reserves, the company said. MindTree has a cash reserve of Rs 200 crore as of March 31, 2008, it added.

Open offer

MindTree would also announce an open offer to Aztecsoft’s public shareholders to buy up to an additional 20 per cent share, the company said. After the additional purchase, the deal value would be about Rs 190 crore, it added.

MindTree said it would initiate the process of merging Aztecsoft after the open offer closes.

The open offer would close in August, and then the actual merger process would start, said the MindTree Chairman and Managing Director, Mr Ashok Soota. It would take another 14- 15 months for the merger process to be completed.

He said the acquisition would have no impact on margins. It would be positive and accretive to earnings per share when the companies integrate next year, said Mr Soota.

With the addition of Aztecsoft, MindTree would offer customers a complete outsourced product development services, including embedded, platform infrastructure, middleware, application and SaaS or cloud-computing software segments, said Mr S. Janakiraman, President and Chief Executive, R&D services. MindTree would also help Aztecsoft to grow in Europe and the APAC region, he added.

As of March 31, 2008, MindTree has 5,700 and Aztecsoft about 2,100 employees, MindTree said. The combined customer strength as of March 31 is more than 250, the company added.

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