Scandent to merge with Cambridge

Scandent Solutions has announced that it is merging with Cambridge Solutions, an erstwhile subsidiary of the US-based Aon Group which it took over in the recent past. Post merger, Scandent will be rechristened Cambridge Solutions and the combined entity will have a topline of close to $270 million (Rs 1,200 crore).

It will be among the top 10 IT companies in India, Scandent informed the Bombay Stock Exchange.

The firm will have an employee base of close to 3,500. The combined entity also plans to raise $75 million in the near future through an equity issue.

Scandent presently has 1,200 professionals focussing on software development services for BFSI, government and manufacturing verticals, while Cambridge focusses on claims processing BPO (business process outsourcing) work with 2,200 employees.

According to Scandent, it will issue 583 fully paid-up equity shares of Rs 10 to those holding one unit in Cambridge. Scandent said that its share capital comprises around 2.8 crore equity shares whereas the share capital of Cambridge comprises 1.2 lakh units.

The number of shares to be issued by the company to the shareholders of Cambridge will be a little over 7.4 crore equity shares of Rs 10 each, fully paid up.

On the issue of raising $75 million, Scandent has stated that it has its options open through a further issue of equity shares or warrants and/or any instruments convertible in equity shares whether optionally or otherwise, global depository receipts (GDRs) or american depository receipts (ADRs) or bonds.

"Increasingly, we see customers who want to integrate their outsourcing requirements with one vendor. The merged entity will be positioned to offer customers a synergistic combination of BPO and IT services," said Chris Sinclair, chairman, Scandent Group.

"It will strengthen our focus and energy on three core verticals "� financial services, insurance and healthcare "� while creating opportunities to expand our expertise into newer areas."

According to Pradeep Choudhry, CFO, Scandent: "The merger is to gain scale for our IT and ITeS business and we will be among the top 10 IT firms in India."

On whether the BPO jobs from Cambridge in the US will move to India, Choudhry said it is too premature to comment on it but added that they are reducing new business work in the US.

Added Patel: "The fresh infusion of funds will be for organic and inorganic growth. We are putting up a new centre in Bangalore which will have a capacity for 3,000 professionals and will be ready by April 2006." He added that 70 per cent of the workforce expansion will happen in India while the remaining expansions will be spread across US, Singapore and Australia.

The company also announced that the new entity will be led by Christopher Sinclair as executive chairman and chief executive officer and will be supported by Satyen Patel as executive vice-chairman. Sinclair was earlier the CEO of Cambridge.