Mascot to acquire two group firms for $10 m

Mascot Systems, a subsidiary of the US-based iGate Corporation, is set to acquire two iGate group companies, eJiva and Aqua Regia Technologies, for a cash consideration of Rs 45 crore ($9.46 million) and Rs 2.34 crore ($0.5 million), respectively.

The move is part of the iGate group's restructuring plan aimed at strengthening Mascot's operations.

The acquisition is aimed at enhancing the operational and financial size of Mascot in addition to expanding its range of services and clientele.

As of the quarter ended September 2002, the revenue for the combined entity would have been approximately $28 million, according to iGate's website.

"As part of this restructuring, Mascot will be headed jointly by Gerhard Watzinger, Mascot's current CEO, and Viv Penninti, eJiva's current CEO, who will both operate as co-CEOs under the strategic guidance of Sunil Wadhwani, chairman, and Ashok Trivedi, vice chairman (Mascot)," iGate said in a press statement on its website.

The company's board of directors approved the acquisition on Saturday.

The transactions are subject to applicable regulatory approvals, Mascot informed the BSE on Monday.

SBI Capital Markets, which had been appointed by a committee of independent directors of Mascot Systems, has conducted the valuations for these transactions, the company informed the BSE.

Mascot will make an upfront down payment of $4.73 million for eJiva, while the balance will be paid in four equal quarterly instalments over a 12-month period.

The solutions business of eJiva had revenues of $25.1 million for the nine months ended September 2002.

This does not include revenues generated from the 50 people working with Toronto Development Centre, which eJiva is currently in the process of acquiring from within the iGate group, the company said.

The TDC will, however, be included in the eJiva solutions business that will be acquired by Mascot Systems effective January 01, 2003.

On the other hand, the Aqua Regia acquisition will be effective from April 1, 2003, when the entire cash consideration will be paid.

Aqua Regia currently has 150 employees located at its development centre in Hyderabad in India eJiva has an expertise in enterprise application services, data management and integration, and business intelligence, areas complementary to Mascot's capabilities in broad-based offshore services, e-commerce solutions and embedded software development.