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Our Bureau

Chennai , March 22

CALIFORNIA Software Co Ltd (Calsoft), the Chennai-based software firm, has acquired a 51 per cent stake in American HealthNet Inc (AHN), a US-based healthcare software product company.

Calsoft would initially invest $1 million in the American firm, which had sales of $6.5 million in 2004, according to Mr S. Santhosh, Managing Director, Calsoft.

"We cannot put a value for the acquisition. We are taking over AHN operations and streamlining their business," he told newspersons.

The American firm would become a subsidiary of Calsoft and retain its identity. AHN has a customer base of over 250 hospitals and clinics in the US and employs about 120. The company made a loss of $600,000 in 2004, he said.

"In the first phase we would reduce 20 employees in quality assurance and testing, and move those works to Chennai," he said.

Calsoft has been developing AHN's Clarus suite of products since 2002. With in-depth knowledge of the product, Calsoft would offer a variety of solutions to AHN customers. The acquisition would also help Calsoft enter the US healthcare software sector, which is a $50 billion market, he said. Calsoft would do product development from its Chennai centre and provide onsite implementation support, and AHN would do sales and marketing in the US, he said.

Mr Steven Nelson, Founder Promoter and Executive Vice President, AHN, said, "A number of people offered more cash than Calsoft. However, we looked at Calsoft as a partner who would bring in good management, expertise and some cash to take the company to next level of growth."

It may be recalled that Calsoft acquired a 51 per cent stake in the Kochi-based Team Frontline Pvt Ltd and 100 per cent stake in the Bangalore-based Web Spectrum Software. The company is integrating the Kochi firm with itself, and the Bangalore firm would remain as its subsidiary, he said.

Mr Santhosh expects that the three acquisitions would help Calsoft achieve revenues of $21-22 million in 2005-06 as compared to $10 million projected for fiscal ending March 2005.

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