Cigniti Tech eyes buyout in US, Europe

Cigniti Technologies Limited (formerly Chakkilam Infotech Limited), a Hyderabad-based independent software testing company, is looking at acquisitions in India, the US and Europe to further expand its footprint in the specialised testing space, according to executive vice president (operations) Sriram Rajaram.

“Right now, we are focusing on offering independent testing as a service and are aiming to grow multifold in this space through inorganic means. Towards this, we are in the process of talking to a couple of companies for between $5 million and $10 million. We are also looking at the swap-ratio option. We should be closing at least one acquisition sometime during the next financial year,” he told Business Standard.

Chakkilam Infotech, in 2011, had acquired US-based Cigniti Inc in an all-stock deal. Post the merger process, it rebranded itself as Cigniti Technologies Limited. The 14-year-old company went public in 2004 and is trading on the Bombay Stock Exchange.

Cigniti on Monday inaugurated its new delivery centre, spread over 34,000 sft, at the Ascendas IT park in Hyderabad. The company will be investing over $4 million (approximately Rs 20 crore) in the centre.

This is the second delivery centre for Cigniti, with the first being in Texas, offering test consulting and managed testing services to clients in the US with a current revenue run rate of $22 million (close to Rs 110 crore).

“We have added 12 new clients in this quarter, and with that we currently have 40-odd clients globally, of which around 90 per cent are from the US. We will leverage the mobile, robotics, compatibility and performance test labs at the Hyderabad delivery centre to cater to those customers,” Rajaram said, adding the two centres would have a combined headcount of more than 500 resources, which is expected to be scaled up to 800 by March 2013.

The company projects a 30-40 per cent growth in revenues for the current financial year, on the back of access to large enterprise clients.

Cigniti Technologies’ scrip ended the trade at Rs 71.45 on the BSE on Monday, down 0.14 per cent, over the previous close of Rs 71.55.