Teledata Informatics opts for 3-way split

Chennai-based software developer Teledata Informatics plans to demerge the company into three separate entities: Teledata Marine Solutions, Teledata Technology Solutions, and Teledata Informatics.

Managing director K Padmanabhan, in a statement, said each business of the company was distinct and had significant potential for growth. "The demerger will ensure better operational management and focus on accelerated growth of individual units and will also ensure higher returns."

He added that the demerged entities would have greater scope for independent collaboration and expansion, coupled with stronger focus on their respective business operations.

"The demerger will also create the potential to attract a different set of investors, strategic partners and lenders for each business, thereby unlocking and enhancing value for shareholders and other stakeholders," Padmanabhan stated.

Endorsing Padmanabhan's statement, company secretary N Ramanathan said that the 339 per cent spurt in revenues, which the company witnessed in its latest quarter (September 30, 2006), made it clear that demerging the company's high-activity area, marine solutions, from high-revenue earner, technology solutions, was inevitable.

"Marine solutions deserved specialised focus, not to mention the higher investor attraction it would gain out of a demerger. And, to sustain our present revenue growth rate, a demerger will also unlock greater value for our marine solutions and stronger individual branding for our technology and software operations," Ramanathan said.

In the six months to September 2006, Teledata's revenues were Rs 976.7 crore.

The technology solutions business brought in 50 percent of the company's revenues during this period and boasts of blue-chip clients like Nestle, Intel, Ericsson, Johnson & Johnson, IBM and ABN Amro.

With the demerger now receiving the go-ahead, Teledata's informatics business will also have lots of scope to expand in its core areas of education, communication, agro biotech and the utility sectors, Ramanathan said.

The process is expected to be completed in three to four months, and the shares of the demerged entities are expected to be listed by April, 2007.

The demerger has been approved by BSE and NSE and the scheme has been filed with the Chennai High Court for approval.

Teledata has about 2,600 people on its rolls, 300 of them in Chennai. The company has been on an acquisition spree to strengthen its marine, technology solutions and informatics divisions.

Teledata Informatics alone has undertaken at least 11 acquisitions in the last six years and the need for greater focus on specific businesses would give the company stronger brand differentiation in the market for individual business units, Ramanathan said.