Kanbay Intl acquires Accurum for $12 m

It is an all-cash deal with the purchase price comprising a $5 million closing payment, subject to certain adjustments, plus contingent payments up to $7 million that is payable upon the achievement of certain performance targets.

Accurum has an office in Chennai that provides IT services for its global clients. In India, Kanbay has software facilities in Pune and Hyderabad.

A lack of scale in Accurum's operations has been cited as the reason for the acquisition.

"Most clients have the whole gamut of services and they expect their IT service providers to offer a similar comprehensive range to add value to the relationship. As a company we were lacking in scale and most clients were demanding scale," said Venkat Vallabhaneni, CEO, Accurum, today at a press conference.

The company will be operated as a wholly owned subsidiary with Vallabhaneni continuing as the CEO. Accurum's 2004 revenue was about $12 million.

"In financial services we are present in insurance, credit services, banking and capital markets. However, our offering in the securities and investment banking segment was not very deep, the acquisition will change that," said Cyprian D'Souza, managing director Kanbay Software (India) and chief people officer, Kanbay International.

It is banking on the acquisition to take to its clients a more complete bouquet of IT financial services. At present, revenues accrued from the capital market segment accounted for 16 per cent of Kanbay's revenues of $182.6 million in calendar 2004.

With the addition of Accurum's 180 employees, Kanbay takes its total number of employees to nearly 4,000 worldwide. It also increases its global footprint with the addition of Accurum's offices in New York, New Jersey and Chennai. Based in Chicago, the company has presence in Europe, US and Australia.