Ciber to acquire Knowledge Systems

Ciber Inc, the $975 million NYSE-listed IT solutions firm, has acquired Bangalore-based Knowledge Systems for $3 million.

The purchase price, including balance sheet net assets of approximately $0.5 million, was approximately $2.5 million initially. The earn-out provision has been targetted at $0.6 million that can be achieved over two years.

Annualised revenue is projected to be $2.5-3 million for the first year, and the combination is expected to be slightly accretive. Ciber expects the transaction to close by June 30, 2005, pending final legal documentation.

Knowledge Systems was founded in 1999 by ex-Wipro senior operating officer H K Katti. Presently, it has approximately 175 consultants, 125 of who are employees and 50 are sub-contractors.

Ciber, a Colorado-headquartered firm is a pure-play international system integration consultancy organisation and employs close to 8,000 professionals globally.

Among Knowledge Systems' intellectual property is a product called 'Oyenok', which is used by commercial banks to secure major credit card transactions, and eBAS (eBusiness Application Solutions), a set of modules akin to ERP products wherein reusable components are applied to customer software development requirements.

Ciber already has its development presence in India and has been providing offshore delivery services and this acquisition will add to its offshore delivery capabilities.

"The pending acquisition of 100 per cent of Knowledge Systems will more than double our current offshore commitment, size and capabilities. We are pleased to add the competencies and scale of Knowledge Systems to our global delivery offerings," said Mac Slingerlend, Ciber's president and chief executive officer in a statement.

"The management of Knowledge Systems, headed by Katti was critical to the decision. In addition to this, S Mohan, also a former Wipro employee, and Sukart Adhikari, who will lead the delivery of our new operations and will make sure of the quality of our delivery of offshore services is on time and up to the standards our international clients requirement," he added.

"Ciber is a perfect fit for us," said H K Katti, Knowledge Systems' CEO.