Prithvi Info to buy US firm for Rs 40cr

In a bid to further consolidate its position in the telecom space, Prithvi Information Solutions Limited, a Hyderabad-based software consulting, outsourcing and business solutions company, is acquiring a US-based firm that is engaged in the network management services (NMS) space for a consideration of between $5 million and $10 million (Rs 20 crore and Rs 40 crore).

Prithvi, whose core competency lies in the radio frequency (RF) engineering space, is currently in the process of doing due diligence. It expects to wrap up the deal within this quarter.

The company had, in 2006, raised $50 million (Rs 200 crore) through issue of zero-coupon FCCBs to Europe-based Lehman Brothers International. It intends to use part of these proceeds to fund its proposed acquisition.

"Major telecom operators, including Bharat Sanchar Nigam Limited (BSNL), want to use NMS in a big way. The acquisition of the US company will help us meet the growing demand, besides bolstering our revenues from the telecom space during the next financial year," Madhavi Vupalapatti, chairperson of Prithvi Information, told Business Standard.

Buoyed by the Rs 309-crore order that it bagged recently from BSNL, which marked its foray into the domestic telecom space, Prithvi Information is now looking forward to more such big-ticket deals.

"Talks are on for a large-size order. We have also submitted bids for a mobile broadband and management services contract from BSNL, and are hopeful of clinching it," she added. The telecom services market in India is currently pegged at $25 billion.

Along with the existing Rs 183-crore orders from US telecom majors T Mobile and Singular, which runs for the next three years, the company expects to derive about 45 per cent of its overall revenues from the telecom space during the next fiscal, from the present 25 per cent.

Stating that the company is also increasingly focusing on the healthcare vertical, which accounted for close to 2 per cent of its total revenues, Madhavi said they were expecting a major chunk of business to flow in from the pharmacy benefit management (PBM) space in the US market, which holds a $5-billion potential for such services.

The company acquired US-based Agadia Systems, which provides solutions to health insurance and PBM companies, around three months back for $3 million (Rs 12 crore).

Prithvi Information clocked revenues of $178 million (around Rs 712 crore) last year and its outlook for the current financial year is $250 million (Rs 1,000 crore).