Hyderabad: Independent software testing services company Cigniti Technologies Ltd. acquired US-based specialized software testing services firm Gallop Solutions Inc. in a deal that will produce the world’s third largest independent software testing services player, with revenue of $40 million.

The deal size wasn’t disclosed. One analyst, on condition of anonymity, estimated the deal size to be $15 million.

Sriram Rajaram, president of strategy and corporate development at Cigniti Technologies, said a definitive agreement was signed on Wednesday and the merger process is expected to be completed in two months after obtaining approvals from various regulatory bodies and shareholders. The deal involved transaction in both cash and stock, Rajaram said on the phone.

Privately-held Gallop, which employs 200 people worldwide and had $9.5 million in revenues in 2012, specializes in building and implementing niche solutions in the application lifecycle management space with a special focus on quality, test automation and test asset modernization, a statement said. It was founded in 2009.

“This merger will add value to everyone concerned including shareholders, clients and employees," Rajaram said.

Manohar Reddy, chief executive officer of Gallop Solutions, said, “Joining forces with a like-minded company in this domain should help us achieve our vision of becoming the world leader in software testing."

The combined entity will employ more than 800 people worldwide.

Cigniti Technologies, founded in 1998, is based in Irving, Texas, with offshore delivery centres in Hyderabad, London and Colombia. It is listed on the BSE. Cigniti said it aims to become the world leader in software testing over the next few years through organic and inorganic growth.

Shares of Cigniti Technologies rose 5% to Rs147 while the bellwether Sensex declined 0.07% to 20,147.64 points.

The worldwide software testing outsourcing market is expected to grow to $50 billion in 2020 from $30 billion in 2010 and India is expected to be the biggest beneficiary, according to industry lobby group Nasscom. India accounted for only $3.2 billion of the overall software testing market but this is expected to grow to $15 billion by 2020, it said in a report on the testing industry.

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