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T.E. Raja Simhan

Chennai, Sept. 25 Saksoft Ltd, the Chennai-based software company, plans to acquire a US-based software testing company to expand its presence in the US. It has appointed Avendus, a Mumbai-based investment bank, to look out for a target company, according to Saksoft’s Managing Director, Mr Aditya Krishna. Software testing will be the immediate priority for growth, he said.

“We are targeting a company with a top line of $10-$15 million and would like to close the deal in 6-9 months,” he told Business Line. The deal will be done through a combination of cash and stock. Saksoft will raise about $6 million from private equity or financial institution for the acquisition, he said.

Mr V. Ramanathan, CEO, Saksoft, has quit the company for personal reasons. He has been replaced by Mr N. K. Subramaniyam, Chief Technology Officer, Birlasoft.

In 2006, Saksoft acquired UK-based Acuma. While the company raised Rs 7.5 crore from IPO for the acquisitions, it paid Rs 77 crore for Acuma. “It was a bad acquisition. Our performance was badly hit last year due to resistance from Acuma’s management to move work offshore. The same people were for moving work to India before acquisition,” he said.

Saksoft replaced the management of Acuma which is now fully integrated with the company. Acuma’s capability around ‘information management’ will help Saksoft win clients in UK and US. With around 60 employees, UK is now a key delivery centre for Saksoft, he said.

“The US financial crisis hit us hard last year. We have now increased our attention on other sectors like telecom and retail,” he said. UK contributes nearly 50 per cent of revenues; US 30 per cent ; Asia 15 per cent and India 5 per cent.

Mr Krishnan said in 2007-08 the company made a net profit of Rs 2.2 crore (Rs 9 crore) on revenues of Rs 120 crore (Rs 96 crore). In the first quarter of the current fiscal, the net profit was Rs 2.5 crore.

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