Helios set to acquire bio-informatics firm

The Chennai-based Helios and Matheson Information Technology will be acquiring a Bangalore-based software company specialising in healthcare and bio-informatics for about $7.5 million.

"Our plan is to emerge as a niche player in healthcare and to increase our share of revenues from the vertical to 50 per cent by 2006. The acquisition will be an all-cash deal and funded mainly from internal accruals and a little borrowing against receivables. We ended the second quarter of 2004 with cash reserves of Rs 19.13 crore," said V Ramachandiran, chairman, Helios and Matheson.

The Bangalore-based company has 120 employees and about 15-20 healthcare clients. Helios sees it as an ideal fit in its plan of becoming a serious player in the healthcare software services market.

The acquisition will be Helios' fifth buyout and third for the fiscal alone. Earlier in the year it had acquired Maruthi Info tech Inc and Jayamaruthi Software Systems for a cumulative $7.5 million, the two companies have a presence in the US healthcare and insurance sectors.

Earlier in 2001, Helios and Matheson had acquired the Los Angeles-based The Laxmi Group Inc, specialising in application development, maintenance support and data base administration, and the Bangalore-based SystemLogic Solutions.

Helios and Matheson relies heavily on the US market from where it realises 70 per cent of its revenues. Hughes Software Systems and Sasken Communication Technolgies, Cisco, KPMG, IBM, Epson and Tata Elxsi are some of the clients.

The company has issued a revenue guidance of Rs 119 crore for 2004-05 and a profit after tax of Rs 17 crore. It also plans on increasing its headcount from 689 to 2000 by end of 2006 and has five software development facilities and six sales offices worldwide.

"We have the ability to ramp up quickly as our wholly owned subsidiary SLS is in the business of training software professionals and caters to all our training requirements," said Muralikrishna G K, managing director, Helios and Matheson.

NSE listing next month: Helios and Matheson has applied for listing on the National Stock Exchange (NSE) and hopes to get listed within a month.

"We had to wait till we had a paid-up share capital of Rs 10 crore, this was achieved in September, 2004 when the shareholders approved a 1:1 bonus issue. Since the retail investors at NSE are ten times more and the volume of trade is three times more we expect our share price to appreciate about 10-20 per cent," Muralikrishna said.