Sasken Communication acquires iSoftTech for $1.45 mn

Sasken Communication Technologies Ltd, a telecom research and development outsourcing solutions company, announced that it has acquired 100 per cent stake in Chennai-based Integrated SoftTech Solutions (iSoftTech) for $1.45 million (about Rs 6.5 crore), in an all-cash transaction.

Sasken will be funding the acquisition from the money it collected ($20 million (about Rs 89 crore)) through private placements, prior to its initial public offer. With this acquisition, Sasken will be expanding its operations to a third location in the country.

Addressing a press conference, Rajiv Mody, chairman and chief executive officer, Sasken Communication Technologies, said that the acquisition was in line with the company's strategy and would further augment Sasken's offerings to its existing customers.

"The acquisition would also provide Sasken access to engineering resources," he added.

Sasken's merger and acquisitions strategy is to acquire companies that either bring new capabilities to serve existing customers or new customers for existing capabilities.

iSoftTech, which employs 100-plus professionals, has been focussing on data networking, VoIP and wireless domains and has nine active customers.

The acquisition is expected to help Sasken make a foray into data communication domain and to offer data communication solutions to its existing customers in a phased manner.

iSoftTech, which reported a revenue of $2.2 million (about Rs 9.8 crore) for the financial year 2005, will opearte as a wholly-owned subsidiary of Sasken and its Chennai operations will become a centre of excellence for data network domain of Sasken.

Sasken also plans to anchor new and key customer relationships out of the Chennai centre.

The two companies have signed share purchase agreements for the acquisition and integration efforts will start immediately. However, integration efforts will not disrupt the operations, added Mody.

Mody said Vijay Babu, president and chief operating officer, iSoftTech, would continue as head - Chennai centre, and there would be no other immediate organisational changes. "All deliveries and commitments to iSoftTech customers would continue as per plan," he added.

iSoftTech was founded in 2001 by Rat Stata, founder and chairman, Analog Devices and Ashok Jhunjhunwala, a renowned professor of Indian Institute of Technology-Madras.