Chennai : It's the first off the block. Within a day of the announcement ofliberalised capital account norms in Budget 2001, Chennai-based DSQ SoftwareLtd has announced that it is likely to complete the acquisition of two tothree overseas software companies in a week. Significantly, letting itsambitions soar in the wake of the raising of the ceiling of acquisitions to$100 million or ten times the export earnings, DSQ has sought approval fromits shareholders for an acquisitions kitty of Rs 1,500 crore-or nearly $0.3billion.The announcement was made by Mr Dinesh Dalmia, managing director of theinformation technology solutions provider, in a meeting with press personsafter the company's extraordinary general meeting (EGM) held here on Tuesday.The company is currently in talks with four to five overseas companies. Thesize of the companies ranges from $30 million to $100 million. The targetcompanies would be project organisations that are debt free and have cash inthe bank. A combination of stock-and-cash would be used for the deals withstock accounting for bulk of the deal. It is in the look out for companiesin the same geographical area and look at valuations below two times sales,Mr Dalmia added.
DSQ Software also obtained shareholder approval for the issue of 10 millionshares on preferential basis at a base price of Rs 500. Also, shareholdersapproval for acquisitions worth Rs 1,500 crore (approximately $ 0.3 billion)through the issue of cash and stock has been obtained.
With the company taking the inorganic route to growth, it expects to postrevenues of Rs 1,000 crore for this calender year. The company has posted atotal income of Rs 528.51 crore and net profit of Rs 126.87 crore for aneighteen-month period ended December 2000.
DSQ Software has a cash balance of Rs 220 crore and has cleared most of itsdebts barring a small amount where there is a pre-payment fee. Also, debt bygroup companies to DSQ Software have been recovered. The counter-guaranteeto group companies provided by DSQ Software has also been cleared. Therehave been no major qualification by the auditors in the balance sheet forthe accounting year ended December 2000, said Mr Dalmia.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
