The Hindu Business Line : Hexaware buys US co for Rs 154 cr

ALL-CASH DEAL: Mr Rusi Brij (left), Vice-Chairman & CEO, Hexaware; Mr Atul Nishar, Executive Chairman, and Mr Suri Chawla, Co-founder and President, FocusFrame, at a press conference in Mumbai on Monday. — Shashi Ashiwal

Mumbai , Nov. 6

Hexaware Technologies said will acquire 100 per cent stake in FocusFrame, a US-based testing consulting firm, in an all cash deal for $34.3 million (Rs 154 crore).

The acquisition is likely to be completed within six weeks, said a statement from the company.

Hexaware will pay $25 million in cash on closing the deal, while the balance amount will paid out over 24 months on meeting projected revenue and margin targets.

The acquisition will be financed entirely through current cash resources, said Mr Atul Nishar, Executive Chairman, Hexaware, at a press conference on Monday.

FocusFrame is a California-based firm specialising in automated testing of ERP and custom applications. The company has 200 employees and has nine Fortune 500 customers and seven `million dollar' clients.

Its acquisition will enable Hexaware, a specialised player in manual software testing, to venture into automated testing and acquire access to the patented `Accelerator technology'. Accelerators allow SAP users to reduce up to 40 per cent of their testing cost and can be applied to other enterprise platforms like PeopleSoft and .Net

"The acquisition completes the required set of testing competencies for Hexaware, allowing increase in market share and accelerated growth," said Mr Rusi Brij, Vice-Chairman & CEO, Hexaware.

"With the acquisition, we expect our total testing services revenues to go up to $100 million (Rs 450 crore) in three years' time," said Mr Nishar.

FocusFrame is likely to achieve revenues of $24 million for fiscal 2006, with 14 per cent profit-before-tax margin.

Hexaware plans to convert FocusFrame's development centre in Mexico into a full-fledged global delivery centre. Hexaware currently has delivery centres in Mumbai, Delhi, Chennai and Bad Homburg, Germany.

For FocusFrame, the acquisition enables them to leverage Hexaware's global delivery capabilities and a much larger client base.

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