Chennai: In a move that will give it greater teeth in the competitive US market, DSQ Software Ltd has acquired a New York-based software firm San Vision Technology Inc (SVT) for an all stock deal worth $30 million. With this acquisition, DSQ Software's equity base will increase by 3.5 per cent or about Rs 1 crore from present capital of Rs 33 crore.SVT promoted by Indian Sanjay Sethi is specialised in professional services like banks, finance and insurance. The US firm logged a revenue of $15 million and is expected to clock $25 million for the year 2000.
DSQ Software chief executive officer Pawan Kumar said the stocks will be given as per Sebi guidelines or market price whichever is higher. SVT has 160 employees and all of them will be eligible for employee stock options.
The Indian software firm is also planning a second acquisition of another US software company on similar lines on an all stock deal basis. The second company will be specialised in telecom network, supply chain management and ERP type products. This acquisition will be completed within two weeks and DSQ Software will seek shareholder approval for the acquisitions within 45 days.
The acquisition of San Vision will enable DSQ Sotware to improve its bottom line. Average realisation of DSQ Software now is $60 per hour while SVT has an average realisation of $85 per hour.
Sanjay Sethi owner of SVT will continue to occupy a senior position in the new arrangement. SVT is expected to be merged with DSQ Software. SVT is reckoned to be among the 200 fastest growing companies in the US and has receivables and cash assets of $8 million and is debt free.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.