CSC ‘in last leg' of AppLabs buy-out talks

K V Kurmanath M Somasekhar Hyderabad | Updated on September 08, 2011

CSC (Computer Science Corporation), the US-based technology services provider, is all set to acquire AppLabs, the Hyderabad-based testing tools company. The two companies are in advanced stage of talks to close the deal.

“They are in the last leg of finalising the price and equity swap. An announcement about the deal might come in a few days,” informed sources told Business Line.

Second acquisition

It will be the second acquisition for CSC in a span of 10 days. On September 1, it bought Baltimore (the US) based Maricom Systems Inc, that sells business intelligence (BI) and data management solutions that form the backbone of health information technology (IT) systems. CSC, which employs close to 93,000 people, acquired 200 professionals from Maricom Systems. AppLabs, with an employee base of 2,000, recently moved to the DLF Special Economic Zone from the city centre office in Jubilee Hills here. CSC has major presence in Noida, near Delhi, Chennai and in Hyderabad. It was keen on expanding its operations in Hyderabad.

Mr Sashi Reddi, CEO of AppLabs, was not available to respond. A CSC spokesperson said the company cannot comment on “speculation.”

Set up by the serial entrepreneur Mr Sashi Reddi, AppLabs emerged as a niche player in the testing tools and quality management solutions. With over 2,000 employees, AppLabs gave an average hike of 20 per cent at the beginning of financial year 2010-11.

Investment firm Sequoia Capital put in funds quite early in the 10-year-old company. “They have invested for long. It is natural that they are seeking an exit,” a source close to the development said. Mr Reddi has started two other companies. He set up EZPower Systems, which developed products to build and maintain large-scale web applications. It was first acquired by DocuCorp and subsequently by Oracle. Mr Reddi also founded FXLabs, a game development company.

Published on September 08, 2011

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