Datamatics to acquire 3 US cos

MUMBAI, AUG 21: The Datamatics group, which owns one of the largest privately held software companies after Tata Consultancy Services, ha...

MUMBAI, AUG 21: The Datamatics group, which owns one of the largest privately held software companies after Tata Consultancy Services, has identified three US companies for acquisition during the current financial year. The acquisitions are expected to cost between Rs 50 crore to Rs 100 crore and will be financed partly through internal accruals, chairman Lalit Kanodia told The Indian Express.

quot;The acquisition is a step towards becoming a global player. We want to present a local image in our country of operations,quot; he said. Datamatics8217; decision follows recent announcements by two other infotech majors, NIIT and Infosys, to acquire US-based software companies. Datamatics has subsidiaries in the US, Japan and Germany.

Anticipating more Indian software companies would go in for overseas acquisitions as they moved up the value chain, the Nasscom quarterly survey asked the government to make overseas acquisitions easier. quot;The strategy for the software industry would involve more acquisitions ofoverseas companies by Indian companies,quot; Nasscom president Dewang Mehta pointed out.

One of the companies short listed by Datamatics specialises in imaging software, the other has expertise in publishing, and the third is a general software development firm. Two of them are relatively small with around 50 developers while the last is around 30 million with 300 developers, Kanodia said.

The acquisitions are likely to be completed before the company goes public by the end of next year. The firm has already made a commitment to list on a stock exchange but is yet to decide on whether to opt for an overseas or domestic listing. It will go for a valuation after its results for the year ending March 2000 are announced. Both TCS and Datamatics Limited are expected to be valued in excess of Rs 1000 crore.

The firm has been pushing for a relaxation in IPO limit for infotech companies and the recent Securities and Exchange Board of India decision permitting a minimum public offering of 10 per cent may tilt thescales in favour of a domestic listing. quot;It is definitely more attractive now. We can do 10 per cent first and let the stock can find its level,quot; said Kanodia.

An Employee Stock Options plan will be also be put in place by in June next year. The attrition rate is expected to come down further from 12 per cent after the ESOPs are announced, said Kanodia. The industry average is around 20 per cent.

Satyam Infoway

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BANGALORE: Satyam Infoway, a leading Internet Service Provider ISP is planning to set up its own gateway up with an investment of Rs 50 crore by the end of this year. The company which operates on 22 MBPS lines leased from Videsh Sanchar Nigam Ltd VSNL, has also earmarked another Rs 50 crore for its expansion plans.

The company8217;s vice-president for Internet sales Pradeep Lakshmanan said on Friday that the ISP would have 32 MBPS of bandwidth by the end of September, which would continue to be used along with the gateway likely to be commissioned by the end of the year.

Lakshmanansaid Satyam Infoway, a wholly-owned subsidiary of the Rs 360 crore Satyam Computer Services Ltd, was inclined to take the satellite route for its gateway rather than cable, since the former would prove to be more cost-effective. The gateway would also offer services to category B8217; and C8217; ISPs, he said, but skirted a query on any acquisitions by the category A8217; leader to increase its base.