Helios buys vMoksha for $19 m cash

Helios and Matheson Information Technology (HMIT), a Chennai-based IT services company, is to acquire an IT outsourcing company vMoksha for a consideration of $19 million in an all-cash deal.

HMIT will acquire three vMoksha entities- vMoksha Technologies Inc, US, vMoksha Technologies Pte Ltd, Singapore and vMoksha Technologies, Bangalore.

The $19 million payout includes a $2 million component that will be paid on achieving 'targeted milestones' over a two year period. The acquisition has been funded from internal accruals.

The acquisition is in line with the company's ambition of becoming a $100 million organisation by the end of 2006.

"The company's (vMoksha) European footprint is very interesting as 35 per cent of its revenues come from there. They have a strong complementarity with HMIT; have zero debt and have a strong management. We have the financial and marketing muscle and they have the technical muscle," said V Ramachandiran, chairman, HMIT.

vMoksha focusses on almost the same verticals as HMIT, these include healthcare, banking, financial services and insurance and manufacturing.

VMoksha has offices in US, Europe, Singapore and India, employs 510 personnel and counts IBM, AIG and American Express as part of its 35 strong client base. They expect to have a turnover of $22 million and a profit after tax of $3.25 million in 2004-05.

The company's promoters, Pawan Kumar and Rajeev hold 50 per cent each of the equity. The company will remain a separate subsidiary of HMITL with Pawan Kumar, CEO, vMoksha continuing as the CEO till after two years when the company will be integrated into HMITL.

Ramachandiran promised that there were more acquisitions in the offing, remarking that there were, "hot prospects in the pipeline".

HMITL is also planning a listing overseas in the next year or two to fund its growth plans. The London Stock Exchange being a strong possibility for the listing.

HMITL's income is expected to be in the range of Rs 120.24 crore and Rs 121.04, with the net profit after tax being in the Rs 17.15 to Rs 17.55 crore range for 2004-05.