Elitecore eyes Rs 100 crore overseas acquistion

In a bid to become a $ 50 million within two years, Elitecore Technologies is mulling to take the inorganic route. The Ahmedabad-based company is looking at a Rs 100 crore acquisition in the US or European markets in the network security segment.

As an option, the company is also open to technology acquisition from innovators in the country.

"We face a tough competition in the network security segment. Yet, recently we became the only Indian company in network security to feature in Gartner's report titled 'Magic Quadrant for SMB Multifunction Firewalls', alongwith the likes of CISCO, McAfee and Symantec. However, we would want to grow as quickly as possible and are looking at the inorganic route to do so," said Hemal Patel, chief executive officer of Elitecore Technologies Ltd.

While the company is pushing for a revenue of $ 15 million (Rs 72 crore approx.) for the financial year 2009-10, by 2011-12, Elitecore intends to peg a turnover of $ 50 million in the network security segment. "We are primarily looking at a $ 20 million (Rs 100 crore approx.) acquisition of competition in the US or European markets since players there carry a larger footprints and will help us to grow large in a very short time. The good thing is that big companies don't see us as competition which may help us in future acquisitions. We are also looking at technology acquisition from innovators in network security across the country," said Patel.

Talking further about the technology acquisition, Patel added, "We will create a platform for innovators to showcase their products and if we find a product suitable for our channel, we will either offer the innovator to be our OEM and earn royalties or allow to be acquired and be part of the company."

Meanwhile, the company will be simultaneously investing about $ 2 million (Rs 10 crore approx.) per annum on R&D to boost its network security offering and reach its $ 50 million turnover target earlier. Of the $ 15 million (Rs 72 crore approx.) revenue that Elitecore is targeting for financial year 2009-10, it expects to earn around $ 10 million of it from SMBs and the rest from large enterprises.