Cubit, Dev Info, ACT Computer to merge

New entity to receive PE funding from US firm.

In a first-of-its kind merger in Gujarat, three Ahmedabad-based IT companies are gearing up to launch a new company to cater to three different verticals "� software, hardware and IT education "� they specialise in individually.

The companies "� Cubit Computers, Dev Information Technology and ACT Computer Education "� are in advanced stages of merging into a new entity, which will receive funding from a US-based private equity firm.

The team from Cubit Computers, one of the pioneers in launching the tablet PC in the country, will head the hardware services vertical.

Dev Information Technology, which has undertaken a number of government projects in Gujarat, will head the software business, while ACT will spearhead the computer education services segment for the new entity.

While officials of the companies concerned refused to comment on the development, market sources said the merged entity was set to begin operations by March 2008. While initial funding for the venture will flow in from a PE firm, the company is also looking at tapping the capital market in the next eight months to raise funds for further expansion.

The move is aimed at offering multiple IT services in the state by pooling in resources, according to the sources.

The Gujarat government, of late, has been emphasising on making the state an IT junction, which is evident in its IT policy 2006-11. The policy envisages a turnover of Rs 5,000 crore from the IT sector alone in the next five years.

According to a recent Nasscom report, Ahmedabad is well ahead of Mumbai, Delhi, Pune and Bangalore in view of the low cost of real estate, lower cost of human resources and stable power supply.

This had led the government to announce concessions and incentives for companies engaged in information technology and ITeS activities.