"This acquisition would provide us the opportunity to further strengthen our leadership position in the financial services industry," said Mr Francisco D'Souza, senior vice-president, Cognizant, in a press release.
The financial details of the proposed acquisition have not been made public. The American Express business represents about 20 per cent of Silverline's revenue, an international media report, which quoted the Silverline spokesperson, said. For the quarter ended March 2002, the company has recorded sales of Rs 37.31 crore and net profit of Rs 13.15 crore.
A statement issued by Silverline to the Bombay Stock Exchange said that the business unit (Amercian Express) was acquired as part of the acquisition of SeraNova, Inc, an eBusiness consulting services company that was acquired by Silverline in March 2001.
"The deal is a landmark one in the Indian IT sector. It is the first time an acquisition of a customer of an Indian company is taking place. Such as easier to effect and this deal should pave way for many more such takeovers," an industry consultant said.
The deal is also expected to ease the cash pressures that Silverline has been facing, analysts said. A media report also said that Silverline's employees in Phoenix, USA had not been paid for weeks. According to industry sources, Silverline has not being paying employees regularly in India too. Silverline officials could not be reached for comment.