To expand enterprise business and enhance market value, Chennai-based California Software Company (Calsoft) has decided to sell its lab businesses in Chennai and Bangalore. The company has entered into a letter of intent with Alten, Europe to sell the business for not below Rs 100 crore.
Sam Santosh, MD, Calsoft group, said: ?We operate in product engineering and enterprise businesses. The market capitalisation of the company is Rs 60 crore. The company is grossly under-valued. Through this transaction, we have proved that the market has buyers for an individual business unit of the company for Rs 100 crore, almost twice its market capitalisation.?
He added the sell-off was a part of the company?s consolidation exercise to cut down the various lines of business and focus on select businesses.
In 2004, the company set up a 30,000 sq ft R&D lab at an investment of $1 million at Bangalore, employing around 250 people. The lab was started to develop products in next generation technologies, 3G, packet cable, wireless networks, IP etc.
?Alten is a billion dollar company operating in the same space and the valuation and pricing is pretty good for them. They will retain people and customers of our lab business to have an off-shore footprint. Post acquisition, the company has proposed to award monetary incentives to employees.?