Lanco to acquire LGSI

Hyderabad-based Lanco Global Systems Limited (LGSL) has decided to acquire by way of merger Lanco Global Systems Inc (LGSI), a corporation incorporated in the United States.

"The company is initiating the process of merger and has decided to appoint a merchant banker to evaluate the two companies for this purpose. The valuation process is expected to be completed in 9-10 months," Lanco chairman L Madhusudhan Rao told newspersons here on Monday.

He said that the Lanco group had also brought in Arjun Valluri, who had acquired substantial shareholding in LGSI, as director and chief executive officer of LGSL. Following the merger, LGSL, a listed company, is expected to emerge as a prominent IT company in Hyderabad.

According to Arjun Valluri, LGSL, which has secured three Fortune 50 companies including GE in the past few months, is targeting a revenue of $ 50 million next year and thereafter a year-on-year growth rate of 50 per cent for the subsequent two years.

While 55 per cent of the targeted revenue will be achieved through the organic route, the remaining 45 per cent will be achieved through the inorganic route.

Valluri said that LGSL would be acquiring five to six companies in India besides adding 500 people to its existing workforce of 200 in the next six months.

He said that the company had already hired seasoned IT professionals and created a global management team. In the current fiscal, the company hopes to gross revenues to the tune of $15 million.