The Hindu Business Line : Aztec scouting for domestic buys

The company had cash and cash equivalents of close to Rs 78.6 crore as on December-end. It has not fixed any timeline to close the acquisitions meant to help it exploit the current rebound in the sector.

Bangalore , Jan. 18

AZTEC Software and Technology Services Ltd. is "actively scouting" for a possible buy-out, top company officials said. "We are in the market and we are evaluating various offers," Chief Financial Officer, Mr V. Sundararajan said.

"We have firmed up our intent to buy (another company) to complement our services offerings," Chief Executive Officer, Mr Partha Sundararajan added. The company had cash and cash equivalents of close to Rs 78.6 crore as on December-end. Close to Rs 46.91 crore of Rs 52 crore that the company raised through initial share sales in November 2000 is lying unutilised.

The target companies are mainly local firms who are smaller or almost equal to Aztec's size, the officials said, declining to detail further on the target profiles. However, the company has not fixed any timeline to close the deal. The proposed acquisition is a "strategic intent" to help the company grow with the current rebound in the technology sector.

Aztec, which started out as a pure technology player in the Internet infrastructure segment during the dotcom boom, has currently repositioned itself as a complete service solution provider to its clients with offerings panning from developing services to maintenance, infrastructure management and even tech-support efforts. Aztec currently caters to 25 clients and primarily focus on ISPs.

The company has reported positive net earnings for last three quarters in the current fiscal after slipping into red following the dotcom bust and cramped technology spending.

Though the sales cycles continue to stay elongated, the company feels that the growing outsourcing boom and increasing interest in offshoring would help it grow in near term. The company derives close to 85 per cent of its revenues from offshore and expects that level to stay stable going forward.

The company sees some discipline returning in the pricing environment, even as the rates were much lower than their historic peaks in 2000-01. "We see the (offshore) rates staying stable in the $18-$19 for the last few quarters," the Chief Technology Officer, Mr Govindarajan V.R. said.

Aztec has almost doubled its employees over the last two quarters to 450 and continues to hire on the back of a robust order pipeline. "We are adding new facility," Mr Govindarajan said, declining to detail expected employee additions in the near term. The company has also bought few acres on the outskirt of Bangalore to set up its consolidated campus.

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