Infrasoft eyes $30 million buyout in Europe, US

In talks with two banking solutions firms in Europe and 4 in the US.

Infrasoft Technologies, a Mumbai-based banking and financial solutions company, is eying an acquisition in Europe or the US in the range of $25 million (approximately Rs 125 crore) to $30 million (Rs 150 crore), said company’s managing director Hanuman Tripathi.

The company is in talks with two banking solutions firms in Europe and four in the US. Besides, it is looking at buyout prospects in the West Asian region, which currently contributes 20 per cent to its overall revenues, for a valuation of about $10 million (Rs 50 crore). “We expect to close one deal either in Europe or the US by March 2009, and the West Asia buyout during the 2009-10 financial year,” Tripathi told Business Standard.

Tripathi said Infrasoft had already signed term sheets and passed through the engagement mode with the US companies for acquisition.

“We, however, put the US buyout plan on hold as these firms couldn’t meet the revenue targets due to the slowdown there. We are now not insisting on a 100 per cent buyout in the US and instead are giving our investment banks an option to look for majority stake acquisition deals,” he added.

Currently, most of the revenues (60 per cent) flow into the 14-year-old company from Europe. It plans to leverage its strong market presence and the acquired company’s capabilities to serve the markets outside of Europe, Tripathi said.

Infrasoft had raised about $27 million (Rs 135 crore) from Baring Private Equity – which has $7 billion of funds under management – in 2007. Only a part of the funds was utilised. “About $25 million (about Rs 125 crore) is still on call, which we plan to use for our acquisitions,” he said.

Infrasoft, which offers corebanking, microfinance and anti-money laundering solutions, is seeing huge potential for corebanking solutions in China. The company is scouting for joint venture partners to enter the region next year. “Tier-II and tier-III banks in China are now looking at deploying corebanking solutions as they have started facing competition from global players, a potential which we plan to tap,” Tripathi said.

Infrasoft reported revenues of Rs 95 crore during the last financial year. The company expects to close the current fiscal with Rs 125 crore on the back of its growing services business in the UK.