ValueMomentum India all set to acquire US affiliate

Hyderabad-based ValueMomentum Software Services Private Limited, a company focused on the BFSI (banking, financial services and insurance industry) segment, is acquiring its US affiliate ValueMomentum Inc.

The two privately held independent companies have a common set of promoters and the common stock of the US-based company is being acquired by the Indian company.

Speaking to Business Standard, Ravi S Rao, managing director of ValueMomentum India, said that once the acquisition was over the common stock would be redistributed to the promoters.

"The whole idea was that earlier the holding was split across companies and now it would be consolidated," Rao said. PricewaterhouseCoopers was engaged as a consultant by the company for the acquisition and valuation process.

The $8.5-million company was recently adjudged as the 'Best Start-up Indian Company' in 2002-03 by the Hyderabad Software Exporters Association (HYSEA). "The total paid-up equity of the company will touch Rs 1 crore once this acquisition is over," Rao said.

The company which has been profitable since its inception also expects the acquisition to simplify issues as and when it accesses the market with a public issue.

"From the long-term perspective of going for an initial public offering and listing, this acquisition makes sense for us," Rao said. ValueMomentum has about 150 professionals spread across its Indian and North American operations.

"We are a professional services company equipped to be outsourcing partners to leading companies for their IT deployment needs. It is indeed imperative to have a leading edge product/service at an affordable price to realize the key objectives of a successful outsourcing plan," Rao said.

ValueMomentum has since its inception managed to snag customers in the US across the insurance, consumer credit and benefits administration segments.

Clients include Physician Mutual Insurance Company, ERIE Insurance, National Grange, HoraceMann Educated Financial Solutions, Prudential Insurance, Capital One, American Express, Fidelity Investments, Horizon Blue Cross and Blue shield, Tarkett USA Inc among others.

ValueMomentum which has a market presence only in North America and follows a January to December accounting year, expects to close the current financial year with revenues of about $10 million.