The Hindu Business Line : Mascon Global buying two US-based cos for $55 m

Chennai, March 12 Mascon Global Ltd will acquire two US-based firms for $55 million. The acquisition will fetch in additional revenues of $70 million in 2008 and put Mascon in partnership with Cisco and General Electric.

One of the companies, Jass & Associates Inc, provides business software services. Based at San Jose, California, it employs 550 people – which will rise to 1,200 by 2010. It also has a software development centre at Hyderabad.

The other company, SDG Corporation, provides identity management services. It is based in Connecticut, the US and is present in India and the UK.

The Mascon’s Chairman and CEO, Mr Sandy K. Chandra, told Business Line that the two companies would bring around 900 employees and revenue of $70 million in 2008. The acquisitions would also help Mascon to have a major partnership with Cisco and enable the company a global delivery solution for General Electric.

The sellers will get $20 million in the form of equity (Global Depositary Receipts) and the rest will be paid in cash. Mascon raised $35 million through convertible bonds in December, Mr Chandra said.

$1 billion target

Mr Chandra recently said Mascon hopes to be a $1-billion company by the last quarter of 2010 — four times the current year’s size.

This will happen by way of internal growth and through more acquisitions.

Mascon is also likely to acquire C-SAM, a US-based mobile transactions company promoted by the technologist, Dr Sam Pitroda.

“We are partnering with C-SAM and our eventual aim is to bring the two organisations together. We should see some results by June this year. When this happens, India will be the centre for important innovations in the telecom industry.”

Acquiring C-SAM will increase Mascon’s footprint in the telecom space. Mascon currently has around 450 people in telecom and C-SAM has around 175, including 120 in development.

Post-acquisition, the combined entity could end the year with around 1,000 employees.

On the Bombay Stock Exchange, Mascon’s scrip closed at Rs 16.80, up by 1.82 per cent.