Silverline in talks for US buys

The company is back in action after being hit during the 2001 dotcom bust.

Mumbai-based IT firm Silverline Technologies is in talks with two US firms for acquisitions. The company plans to close at least one deal, in the range of $10- 40 million (Rs 40-160 crore), during this current financial year.

Since the start of this calendar year, the firm has already announced two acquisitions "� first was the Canada-based contact centre "� OMDR, and the second gave the company an entry into the healthcare segment.

The firms which Silverline plans to acquire now, are expected to help it deliver global services in the enterprise resource planning (ERP), middleware and business intelligence segments.

The acquisitions have come as a surprise to stock market analysts. Silverline Technologies was one of the biggest casualties of the dotcom bust of 2001 from among the Indian stock market-listed companies.

The company, which also was the first New York Stock Exchange-listed Indian IT services company when it raised $100 million from US investors in 2000, had hit rock bottom in 2003-04.

All the six dotcom companies it acquired using the American depository receipts funds went bust, and its net worth saw complete depletion. It was forced to close all the US and Indian operations and its shares were delisted from the NYSE due to non-reporting of quarterly numbers for six quarters running.

Titus Sequeria, executive director and chief strategy officer, "We have learnt from our mistakes and the biggest difference this time is we know what not to do."

Unlike the last time, the company is not doing all-cash deals. The acquisitions will be all-share deals with an earnout spread over a period of three years based on demonstrated topline and profitability committed at the time of acquisition. The target company should be making profit of at least 10 per cent and have free cash flow.