Accel ICIM in joint venture with Singapore firm Frontline

Chennai-based Accel ICIM Systems and Services Ltd, announced its joint venture with Singapore-based Frontline Technologies Corporation Ltd (FTC).

FTC has invested $7.6 million in Accel ICIM, a part of which is paid to existing shareholders, ICICI Venture and Intel Capital, for a 41.9 per cent stake in the company.

The closure of the deal will leave 15 per cent stake in the hands of ICICI Venture and Intel Capital and the balance 43 per cent in the hands of management and employees of Accel ICIM.

Commenting on the joint venture with FTC, N R Panicker, chairman of Accel ICIM said, "The alliance with FTC will help Accel ICIM to sharpen is technology skills in critical areas such as information security, business continuity services and outsourcing as we move up in the value chain."

Panicker said Accel ICIM would close the current fiscal with a topline of Rs.170 crore and expects a topline growth of over 22 per cent in the next fiscal.

FTC officials said that any further investments by the company in India would be routed through its joint venture partner, Accel ICIM.

Panicker added that the share of the company's service business as a percentage of total income is expected to grow to 30 to 50 per cent in the next three years, against 25 per cent at present. Presently, an estimated 75 per cent of Accel ICIM's revenue comes from IT infrastructure business.

The infusion of fresh capital would partly reduce the debt in the company's balance sheet apart from improving its working capital.

Accel ICIM officials said around $4.4 million will be injected into the business to expand its IT and business process outsourcing divisions and also increase working capital.

The balance $3.2 million of the fresh infusion of capital would be used to purchase the shares from prior investors and retirement of some loans.

FTC is a IT service provider with a broad spectrum of end-to-end solutions which include consulting, infrastructure and applications development and outsourcing. The company is present in five countries in Asia, including China.

FTC's chairman Steve Ting said, "This partnership will provide Frontline, presence in the booming Indian market." FTC, through this joint venture, is planning to cross-sell Accel ICIM's solutions outside India.