Hyderabad, August 24, 2004 -- Four Soft Ltd (FSL), an enterprise applications product software development company, has decided to go for inorganic growth to scale up its operations in the overseas market, particularly in the US and Europe. In Asia-Pacific (Apac), it will be directly involved in identifying potential companies.
Flush with funds from an initial public offer (IPO) a few months ago, coupled with internal reserves, the company is targeting two to three small and medium enterprises (SMEs) which operate in the same domain areas (transportation and logistics) as that of FSL with a strong client base to scale up its operations in these markets, said Four Soft managing director Palem Srikant.
Palem said the company has recently appointed US-based Albeon Group and RoI Insurance to identify and negotiate for suitable acquisitions. "We plan to acquire one or two SMEs which would not only help scale up Four Soft's growth but also help sell its products in these countries with an improved focus," he said.
Inorganic growth is one of the focus areas for the company's overall growth strategy and as a product company, acquisitions will enable FSL to grow speedily with a substantial clientele and revenue base.
"We are targeting companies in the US, Europe and Apac as these markets hold great potential for the company's products," Palem added.
Though the company has not earmarked any fixed amount for the acquisitions, the total cost would be around Rs. 40 crore, he said. Further, the company would fund the acquisitions through the money raised from the recent IPO apart from the investments made by UTI Venture Fund and APIDC-VC during last year. "The company has a cash reserve of close to Rs. 35 crore," he added.
The acquisitions would be with 100 percent shareholding and management control, with the deal to be finalised with partly cash and partly stocks and the balance by generation of future profits by the acquired company. "We expect the acquisition(s) will take place before the end of the fiscal," he said. Moreover, as part of its expansion, the company has opened a new marketing offices in Singapore and North America. |
News Releases