Info-tech

Datamatics buys 72% in Cignex for Rs 120 cr

Our Bureau New Delhi | Updated on November 16, 2017 Published on August 16, 2011

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Outsourcing company Datamatics Global Solutions has acquired a 72 per cent stake in Cignex Global Holding Corporation, a provider of open source and SAP Connect solutions, for Rs 120 crore.

This acquisition will further strengthen Datamatics' tentacles in the enterprise content management and enterprise document management space, Mr Rahul Kanodia, Vice-Chairman and CEO, told Business Line.

Once the deal goes through, the enterprise content management and document management space would contribute around 45 per cent to its revenues from 30 per cent currently, added Mr Kanodia.

The California-based firm Cignex provides solutions such as Web content management, portals and social collaboration, e-commerce, and documents and records management. Interestingly, Datamatics had formed a joint venture with Cignex last year.

“We will take a call on the joint venture soon…In all probability, we will roll it into the organisation (Datamatics),” said Mr Kanodia.

Cignex client list includes marquee names such as Electronic Arts, Medco, Sesame Street, Daiichi Sankyo, Nomura Bank, Singapore Telecom and DBS Bank. This acquisition will also benefit Datamatics in increasing its footprint both globally and in India, as per a press statement.

Cignex has presence in overseas cities such as San Francisco and Singapore.

But why did Datamatics chose not to acquire 100 per cent stake in the target company?

“We believe in the existing promoter group and we want them to stay put as there is an upside for all parties involved…having said that we have the option of acquiring the remaining shares of Cignex as we go along,” said Mr Kanodia.

The agreed consideration of Rs 120 crore will be paid out to Cignex over the next two years depending on the completion of several milestones.

For the first quarter ended June 30, Datamatics reported a 38.4 per cent rise in net profit to Rs 6.7 crore as against Rs 4.94 crore in the same quarter a year ago. Revenues increased by 54.5 per cent to Rs 101.68 crore (Rs 65.81 crore).

On the BSE, the Datamatics scrip was up by 0.85 per cent to close at Rs 29.8.

Expanding footprint

Cignex provides solutions such as Web content management, portals and social collaboration, e-commerce, and documents and records management

Cignex has presence in San Francisco and Singapore

Published on August 16, 2011
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