Megasoft eyes acquisition in US

To set up campus in Hyderabad in next 3 years

Megasoft, a product-based technology company that works in domains like life sciences and IT consulting services, is eyeing the inorganic route of growth again. This time it's the US market that is on its radar, and the company plans to make an acquisition in the next six months.

In July this year, the company had announced the acquisition of a German entity "� beam AG "� to gain a foothold in the European market. Megasoft intends to follow a similar route to acquire clients in the US market. The company also plans to set up a campus in Hyderabad in the next three years.

Speaking to Business Standard, G V Kumar, managing director and chief executive officer of Megasoft, said, "Talks are underway with a few companies in the US and we are strongly looking at an acquisition in the next six months. The companies that we are looking at are typically in the range of $3-6 million in size and have a significant presence in that market."

"The contribution of foreign markets to our revenues is on an upswing. One of the reasons for our focus on the international segment is that the deal sizes in the foreign markets are usually double or triple the deal sizes in India," he added.

"We are looking at setting up a 70,000-sq ft campus in Hyderabad in the next three years. We have already approached the Andhra Pradesh government for land," Kumar said.

Before that, in 2006, the company will be shifting to a 30,000-sq ft leased facility in Madhapur with a capacity to house 400 resources. "In the next three-six months, we intend to increase our headcount to around 230 in Hyderabad," he added.

Megasoft amalgamated with Xius India Limited, a provider of mobile telephony platforms and products, in 2004. The Srini Raju-promoted i-Labs group, which holds stakes in both the companies, now holds a 20 per cent stake in the merged entity. Megasoft earned consolidated revenues of Rs 85 crore in 2004.

Xius is now Megasoft's telecom brand that enables mobile operators to authenticate, authorise and charge subscribers in real time. It has its development centre in Hyderabad where it currently employs 150 people. It has another development centre in Chennai.