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To strengthen its enterprise offerings in the analytics and business rules management space, Chennai-based California Software will acquire a 100 per cent stake in US-based technology consulting firm International Innovations.
The company's valuation will be capped at a maximum of $1.32 million (approximately Rs 5.3 crore).
The letter of intent to purchase the Mountain View, California-based company will culminate in a definitive share purchase agreement, the process of which is expected to be completed by December 31, 2007.
The deal envisages phased payments by Calsoft over a period of one year from the conclusion of the share purchase agreement, and will also be based on certain performance parameters, Calsoft informed.
With profit after tax of $300,000 this quarter, the Innovations acquisition is expected to add $2.3 million to Calsoft's cash kitty over the next 12 months, S Santhosh, managing director and CEO, Calsoft, said.
Piyush Govil, founder and CEO of Innovations, said, "Calsoft's strategic equity stake would help Innovations to extend its capabilities and global reach, and further strengthen the latter's American business."
After the initiation and expansion of its Oracle application practice, Calsoft has seen significant increase in business in the enterprise applications area in North America, which contributed 66 per cent to the topline during the September quarter of this financial year, followed by Europe and the Asia-Pacific region.
International Innovations delivers information management solutions through business intelligence tools, analytics, business rules management and enterprise search capabilities.
The company has experience of a diverse range of clientele in sectors such as mortgage banking and financial services, echnology, manufacturing, travel and telecommunications.
Cisco Systems, Charles Schwab, Washington Mutual, APL, and Wells Fargo are on the company's customer A-list.
Calsoft posted consolidated revenues of Rs 169 crore for the year ended March 31, 2007. Calsoft and its subsidiaries presently employ over 1,000 people at development centres in Chennai, Bangalore and Mysore, as well as Pleasanton (California), Alameda (California), and Boston (Massachussets).
