Take Solutions, a $23 million (Rs103.5 crore) software product development firm, plans an initial public offering (IPO) of three million equity shares with a face value of Rs10 each. This is a part of its strategy to raise money for more acquisitions and a new facility in a special economic zone (SEZ) outside Chennai, said managing director Sridharan Sivan.
Two US-based companies have already been identified for acquisition, one in the supply chain management space, and the other in the life sciences space. Agreements have been signed on a non-disclosure basis.
In December, the company filed a draft red herring prospectus, which means neither the number of shares nor the price was disclosed, with the Securities and Exchange Board of India. According to the prospectus, the supply chain management company serves more than 250 manufacturing and distribution firms worldwide, while the life sciences firm was the first to introduce the “software as a service” concept to the food services industry.
Take Solutions also plans to set up an SEZ on the outskirts of Chennai, while also prepaying existing term loans worth Rs20 crore, said Sivan. Some of the money would also go into developing the company’s product in the business process management space.
The firm declined to comment on the exact amount it hopes to raise, but the estimated cost of the planned investments, apart from the acquisitions and the cost of issuance of shares itself, stands at about Rs58.2 crore.
Last year, Take Solutions acquired two companies in the US –OnSphere Corp. and Applied Clinical Intelligence, both software firms operating in the life sciences space. It also tied up with W J Towell & Co LLC, part of the Towell group, a large conglomerate headquartered in Muscat, last year, to market the company’s software to manage suppliers in the Middle East.
“Establishing a presence in the product space in a new market is very difficult - we prefer to grow inorganically in that respect, and we will continue to pursue that strategy,” said Sivan.
Currently, about 47% of the company’s revenues come from its life sciences business, specifically its products and services suite OneClinical. Most of the business in this segment is generated from the US. In the Asia Pacific region - the only other area where the company has clients – most of the business is in OneSCM, the company’s supply chain management product suite.
“One of the acquisitions that we would make with this IPO would enhance our supply chain management business in US,” said Sivan.
The company would use the acquisition to add other industries to the suite. “Currently we service companies in the food and beverage, fast moving consumer goods and consumer durables space, but will enter the aerospace and other high tech segments with the acquisition,” he added.
Last year’s revenue of $23 million represented a growth of 100% over the previous year. This year, Sivan expects “that trend to continue.”For the six months ended 1 September 2006, the company recorded revenues of more than $17 million, Sivan said.