Mergers News: 2/12/09

GSS AMERICA INFOTECH EYES ACQUISITION
Financial Chronicle  

IT solutions firm GSS America Infotech has decided in-principle for acquisition of identified firms, as part of its in-organic growth plans. The board has authorised its CEO to do next steps of due-diligence.

L&T INFOTECH EYES BUY IN $200-500 M REVENUE RANGE
Dow Jones, Bangalore
The Hindu Business Line

L&T Infotech Ltd is looking for an acquisition in a revenue range of $200-500 million.

L&T Infotech wants to buy a company as this will help it achieve its goals of $1 billion revenue and listing on stock exchanges by March 2012, V.K. Magapu, Director, L&T group, told Dow Jones in a recent interview. “We have to do an acquisition. There is no doubt about it,” said Magapu. “We wanted to do it (reach $1 billion revenue and list) by 2010, but we will miss the boat by a couple of years,” he said, adding that the company currently clocks about $450 million annual revenue.

He added that L&T Infotech sees synergy in acquiring a company in the US, which will give it market presence in the country's software industry's biggest market.

The L&T Infotech Chief Executive, Sudip Banerjee, said the company is keen on acquisitions as a strategy to expand its business. He added that it could acquire to build business volume or to add new customers and service lines.

However, Banerjee termed reports of the company seeking to pick up a stake in rival Patni Computer Systems as “market speculation.” Funding any acquisition isn't a concern as the company has a strong parent in Larsen, he said. “We are part of a very large conglomerate where the ability to raise money is certainly there.” Magapu said another reason for the company's March 2012 listing timeframe is that it is likely to wait for a rise in the parent company's shares, which are expected to mirror increased activity in the power and infrastructure sectors.

“When that rise (in L&T shares) is beginning to plateau, L&T Infotech will list,” Magapu said.

Banerjee said listing as an independent company will give the company more legitimacy as a serious player in the industry, and is not meant to raise funds.