Sonata Software jumps over 4% on acquiring US-based Quant Systems

The company's North America arm has inked an agreement to buy 100 per cent in Texas-based Quant Systems in an all-cash deal of $65 million.

Sonata Software jumped 4.5 per cent to a high of Rs 721 in intra-day trades on Thursday on the BSE, after the company's North America arm inked an agreement to buy 100 per cent stake in Quant Systems Inc, a Texas based IT services corporation in an all-cash deal of $65 million. The company will also pay up to $95 million over the next 2 years for achievement-based earn-outs.

According to a release issued by Sonata to the BSE, Quant Services is an Enterprise Data Analytics and Cloud modernization service provider for leading Fortune 500 clients. The firm has deep domain expertise in Banking and Financial Services, Healthcare & Life Sciences, and Consumer / Retail businesses. 

The company had more than 300 engineers, and had clocked a turnover for $37 million in the calendar year 2022. In the preceding two years the company recorded a turnover of $25 million and $8 million, the release added.

As of 09:55 AM, shares of Sonata Software quoted 4 per cent higher at Rs 718 in an otherwise volatile market. In comparison, the S&P BSE Sensex was up 0.2 per cent at 59,870.

The stock had hit a 52-week high of Rs 753 on February 20, and has so far rallied nearly 18 per cent this month as against a 0.5 per cent decline on the BSE benchmark index.

In Q3FY23, Sonata's IT services dollar revenues grew 4.7 per cent quarter-on-quarter (QoQ) and 3.9 per cent in constant currency (CC) terms, while rupee revenue came in at Rs 489.6 crore, up 6.3 per cent QoQ and 23.9 per cent year-on-year (YoY).

Last year in April 2022, Sonata had appointed Samir Dhir as the Managing Director and CEO of the company. The new CEO reiterated that he is planning to double IT services revenue in four years as he is looking to accelerate the growth from here on. 

Sonata offers IT services (30 per cent) and product licensing & deployment (70 per cent). The company provides IT services to travel, retail, agri & commodities and manufacturing and software vendors. The company is net debt free and has healthy double digit return ratio (with RoCE of over 30 per cent).