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| Infotech eyes two acquisitions in aerospace sector |
| BS Reporter / Hyderabad Feb 09, 2009, 14:06 IST |
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Infotech Enterprises, a Hyderabad-based provider of engineering design, geospatial information and IT services, is planning to close “two good-sized acquisitions” in the aerospace domain in the next six months, said Krishna Bodanapu, senior vice-president (manufacturing services).
“At our recently-convened board meet, we have redefined our strategy and decided to significantly build on where we are already good at – the aerospace vertical. And accordingly, we have restarted the process of identifying companies. We expect the valuations to come down to a realistic level in the next 6 to 12 months. We are realistically looking at two acquisitions with each deal being anywhere between $30 million (Rs 147 crore) and $50 million (Rs 245 crore),” he told mediapersons here today.
Infotech is targeting firms that have the right set of skills and nearness to customers in the US, besides looking at companies that will help increase its competency in terms of delivery in China, Romania, India and Russia in the areas of geographic information systems (GIS) and engineering within the design space, Bodanapu said, adding the company proposes to fund its acquisition plans from the $75 million (Rs 367.5 crore) it had raised in 2007 through private placement of 15 per cent of its equity stake.
“We have also been accruing cash ($10 million in the first quarter of FY09),” he said.
“The proposed acquisitions are expected to strengthen our aerospace vertical, which sees an annual spend of about $90 billion globally, both on processes and technologies. We are currently negotiating with multiple companies for bagging contracts,” he added.
Bodanapu said the company was encashing on the opportunities provided by the defence offset programmes and has recently signed an agreement with Eurocopter for the Indian Ministry of Defence's 193-attack helicopter programme. whose upfront cost is estimated at $2 billion.
Having gained 7 million man hours of expertise with 1,800 engineers dedicated to aerospace globally, the domain accounted for $50 million of Infotech's total revenues last year. The company expects the sector to contribute $70 million in FY09 and targets to maintain the 40 per cent growth in FY10 based on long-term pipeline of contracts, he said.
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