Need to Know | iGate Corp on lookout for acquisitions

Need to Know | iGate Corp on lookout for acquisitions
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First Published: Tue, Jul 08 2008. 01 48 AM IST
Updated: Tue, Jul 08 2008. 01 48 AM IST
Bangalore: Having cleaned up its capital structure over the past three years, the Nasdaq-listed iGate Corp., a mid-sized IT services firm, is looking at acquisitions to enhance its revenue base which should help the company bid for outsourcing deals above $50 million (Rs216 crore).
Phaneesh Murthy, CEO, iGate Corp. admitted that scale was becoming an issue as the company bids for outsourcing deals in sizes of $50 million and above. “We still lose more deals than we win. It is important for us to bulk up a bit more now,” he said.
Companies such as iGate do not have access to those outsourcing deals worth $50 million and above because of the intensifying competition, wherein the IT services vendors including multinationals such as IBM and Accenture compete for the same set of deals from Fortune 1000 customers.
IGate is looking at potential firms with revenues in the range of $100-200 million, Murthy said without disclosing details. The Pittsburgh-based iGate expects to finalize the buyout plans once its $100 million staffing services business that consists of entities such as iGate Mastech and RPOworldwide, was spun-off.
IGate, which serves clients such as General Electric and Royal Bank of Canada, reported a 79% rise in consolidated net income for the year-to-December at $15.6 million while consolidated revenues grew 8.3% to $307.3 million over the previous year. The company delisted its India-based subsidiary iGate Global Solutions Ltd in the quarter-to-March and merged the entity with itself. Commenting on the current market conditions in the US, Murthy said the overall spending level has come down with customers choosing to divert their discretionary spends on efficiency improvement projects that helps them to save costs.
IGate is expanding its delivery capabilities in Chennai by adding 1,200 seats.
Last month, iGate opened a small delivery facility at Ballarat in Australia, to serve clients in the region, especially in financial services and government sector.
- Vishwanath Kulkarni
Open offer to Lotus Chocolate shareholders
Hyderabad: Hyderabad-based ailing confectionary company Lotus Chocolate Co. Ltd (LCC) is all set to change hands for the fourth time and being acquired third time in its two decades of existence.
Originally promoted by Telugu film actor Sarada, the chocolate company was acquired by the Singapore-based confectionery group Sunshine Allied Investments in July 1993 and subsequently by a chartered accountant and stock broker Devabhaktuni Durga Prasad along with Aalapati Ramakrishna in August 2003.
This time, two businessmen belonging to machinery fabrication industry — Peraje Prakash Pai and Peraje Anantha Pai—are preparing to acquire the company. The Pai duo has entered into a share purchase agreement with the existing promoters of LCC on Saturday to acquire 54,46,000 shares, representing 42.41% of equity, at a price of Rs15 per share, aggregating to Rs8.17 crore. They have also agreed to buy 73,96,000 cumulative redeemable preference shares at Rs4 per share, translating into Rs2.96 crore.
With the acquisition attracting guidelines of Indian securities market regulator, the acquirers are coming out with an open offer to the LCC shareholders to buy 25,68,000 shares, representing 20% of the company’s equity, at Rs16 per share for a total of Rs4.1 crore. LCC had posted a net profit of Rs74.92 lakh on revenue of Rs24.14 crore for the fiscal ended March. While reserves and surplus stood at Rs3.94 crore, the company has accumulated losses of Rs23.15 crore as on last count.
The LCC scrip gained 0.6% on Monday to close at Rs15.16 on the Bombay Stock Exchange on a day that saw the exchange’s benchmark indices gaining 0.54% to end at 13,526 points. In fact, the LCC scrip opened at Rs16 on the bourse and witnessed a day’s high price of Rs16.40 and a low of Rs14.37.
- C.R. Sukumar
Pharmaceuticals dept to oversee drug policy
New Delhi:The notification for a new department of pharmaceuticals under the ministry of chemicals and fertilizers was issued on Monday with Ashok Kumar being appointed as the secretary of the new division. The newly created department will oversee all policy matters relating to drug price monitoring, availability, pharmaceutical research and manpower training, public sector drug units as well as public private partnerships in the medicines space. Drug price regulator National Pricing Pharmaceutical Authority, or NPPA, will now be affiliated to this department. It could not be ascertained immediately who will step into Kumar’s shoes, who was the chairman of NPPA before taking the charge as the third secretary under the ministry.
- Bhuma Shrivastava
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First Published: Tue, Jul 08 2008. 01 48 AM IST