Tulip India Floats Company To Focus On Acquisitions

Tulip India, the Dutch information technology giants Indian subsidiary, has floated a closely-held company called ESBES to focus solely on acquisition of regional IT companies. Tulip India managing director Sandip Bhatia said, ESBES has finalised plans for the takeover of the Delhi-based Cals India and the Mumbai-based multi-media company, Folklore Communication Management Services.

Besides, company sources say that the Chennai-based Armaan Electric, which makes computer peripherals, will be acquired by ESBES after due approvals from financial institutions. Bhatia said, The takeover corpus fund is around Rs 7 crore at present, which will double with the first takeover.

ESBES has appointed Mike Shah, director, Regent Associates, the UK-based consultants specialising in mergers and acquisitions of IT companies, to guide it on its takeover course.

 

Simultaneously, Tulip India has downsized its Bangalore project from Rs 100 crore to Rs 10 crore. The project was initially supposed to produce computer peripherals and hardware. Under the new plan, the plant will just be an assembling centre and not a manufacturing one.

Bhatia attributed the downsizing to deteriorating export conditions and a realisation that an assembly plant of a lower size is in order.

Meanwhile, it is learnt that ESBES move to acquire the Mumbai-based Minicomp Ltd has run aground. Bhatia confirmed this, but refused to elaborate. Regarding Cals India Bhatia said, ESBES aim is to acquire the Rs 18-crore company soon. This is natural, considering its portfolio of products which includes LAN and WAN. Cals India showed a modest growth of 27 per cent in 1995-96 in turnover over the previous year. However, its net decreased from Rs 1.23 crore in 1994-95 to Rs 1.06 crore in 1995-96.

Apart from this, Tulip India is restructuring its operations in order to reduce costs. Though Bhatia said the revamp plan would be implemented soon, he refused to disclose the details of the same.

In addition, ESBES has finalised plans to acquire Folklore Communication Management Servicesa multi-media and Internet and product design firm.