Infotech buys Tele Atlas arm for Rs 8.3 cr

Hyderabad-based Infotech Enterprises Ltd has acquired Noida-based Tele Atlas India Pvt Ltd, a wholly owned subsidiary of Tele Atlas BV of the Netherlands.

Infotech has acquired Tele Atlas, a provider of digital maps, geospatial products and dynamic location content, in an all-cash deal worth Rs 8.29 crore. George Fink, president and chief operating officer of Tele Atlas, would join Infotech's board of directors.

This apart, Infotech has also entered into a long-term services agreement with Tele Atlas for providing database and software solutions.

Tele Atlas has guaranteed purchasing a minimum of 2.5 million hours of service over the next three years from Infotech due to which the latter expects a revenue addition of between Rs 70 crore and Rs 90 crore.

Tele Atlas has also been offered a three per cent stake in Infotech through preferential allotment of shares.

Addressing a press conference, B V R Mohan Reddy, chairman and managing director of Infotech, said, "Tele Atlas has evinced interest in strengthening a long-term relationship with Infotech and we have agreed to offer them equity shares at a 10 per cent premium on a preferential allotment basis."

"The number of shares offered to Tele Atlas would be up to three per cent of the current paid-up share capital of around Rs 14.8 crore," Reddy added.

Post dilution, Infotech's paid-up share capital is likely to increase to Rs 15.17 crore. Tele Atlas also has an option to increase its stake in the company.

"The shares offered to Tele Atlas would be subject to the regulatory approvals of the Securities and Exchange Board of India (Sebi) and the approval of shareholders of Infotech. An extraordinary general meeting of shareholders is being called on April 21, 2005, for this purpose," Reddy said.

"With this acquisition, we now have two customers (Tele Atlas and Pratt & Whitney) who are also our investors," he added.

US-based Pratt & Whitney, which is into manufacturing of aircraft engines, has approximately 15 per cent stake in Infotech.

"Tele Atlas has around 600 employees in Noida while we have around 2,400. With this acquisition, our headcount has increased to 3,000," Reddy said, adding that there will be no retrenchment in Tele Atlas in the short-run, although there might be some role-change.

Bruce Radloff, chief technology officer of Tele Atlas, said, "We provide digital maps and dynamic location content for a variety of government entities, transportation companies and utilities. Besides, the internet and wireless space has great growth prospects. "